Take Advantage of the 45L Credit for Residential Buildings Through 2021…and Let’s Hope it Gets Extended for 2022 and Beyond
Authored by Patrick G. Risse (Energy Tax Credits : All Construction : Industries : CLA (CliftonLarsonAllen) (claconnect.com)
The Energy-Efficient Home Credit, also known as the 45L credit, is currently available through December 31, 2021. We are all waiting and watching to see what happens with the credit’s future for 2022 and beyond. In the meantime, please enjoy a couple of stories to help you understand how these credits have benefited developers. While reading, you might think of a project developed and leased or sold in 2018, 2019, 2020, or 2021 that could be worthwhile to discuss with us for a current or amended year tax return.
The first story begins with a CLA Professional visiting a developer-client. While discussing reviewed financial statements, the CLA Professional asked about their residential dwellings being developed. Enthusiastically, the client described several apartment buildings near completion with plans to lease all units by year end. As a follow up, CLA FTS prepared a proposal to show their potential credits of over $1.2M for three apartment buildings and went on to complete the studies.
Another story unfolded in a similar way. In a completely different city and state in the continental USA, a CLA Professional was having lunch with a 20+ year client. After talking about all their exciting activities going on, our CLA Professional suggested an energy efficiency study on a large apartment building being developed. The study resulted in over $600,000 in credits.
Taking advantage of the 45L credit requires specific capabilities, and we have the skills and experience to identify the eligible credits, collect supporting information, and submit the required tax forms.
Ben is a trusted professional advisor providing tax, accounting, assurance and consulting services to the construction industry. As a tax principal in the Minneapolis, MN office of CLA he helps construction company's and their owners navigate industry challenges and complex tax legislation. He gained experience with 2 regional firms and a sole proprietor for 19 years prior to rejoining CLA in 2016. Ben serves as National Construction Tax Leader for CLA and is a member of the CLA Construction Strategic Leadership Team.
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