As tax season approaches, many home builders may be unaware of potential tax credits that could translate into significant savings. The 45L tax credit is available to single-family and multifamily developers exceeding 2006 energy standards.
This means a company building 100 homes a year could go back and claim $2,000 per qualifying home for 2018, 2019, 2020 and 2021 (dependent on the date of filing). This can total to about $800,000 in general business income tax credits, which are as powerful as net income. Further, this same home builder could be eligible for about $30,000 in research (R&D) tax credits for qualifying research, design and development activities.
The 45L energy tax credit is claimed in the tax year each home/unit is first sold or leased. The credit can be claimed for newly constructed and substantially renovated homes and apartments. Claiming the credit requires energy modeling, testing, and certification from an eligible certifier, such as the engineering staff at BRAYN Consulting. Approved home inspection sampling methods allow for minimal disturbance to home owners. Single-family, manufactured homes, apartments, condos and assisted living facilities that are three stories or less are eligible.
Certain home design activities and the design of specifications and plans for volume home building can qualify for both R&D and 45L tax credits. In short, no matter the size and scope of your projects for the year, architectural, engineering, and construction firms alike stand to benefit from these niche tax credits that often go unnoticed.
The BRAYN team is composed of lawyers, engineers, HERS raters, and accountants with extensive industry experience in various disciplines. We work collaboratively with your CPA firm to assist in the review, documentation, and substantiation of the tax incentives specific to your business.
BRAYN has a three-phase process for each study. We provide a free phase 1 analysis of the 45L and R&D tax credits. Phase 2 consists of detailed calculations and computations with final numbers that can be put on your tax return. Phase 3 is a transparent, comprehensive, auditable document with qualitative and quantitative support prepared with an eye towards examination. We provide full audit support and have substantiated 96% of all dollars under audit.