As reported earlier by NAHB, President Obama has signed into law a tax package that provides a renewal of several energy-related tax credits which have become very popular with California home builders in recent years.
- New Home Energy-Efficiency Tax Credit (45L): The renewal of this provision provides builders with a $2,000 tax credit for each new home which exceeds the federal “base energy code” by 50%. The federal government uses the 2006 Edition of the International Energy Conservation Code (IECC) as their base energy code. This renewal will extend this tax credit to homes built in 2015 and 2016.
- Residential Clean Energy Tax Credit (25D): This provision extends through 2022 Section 25D of the tax code which provides a 30% tax incentive for installing solar energy on residential dwellings. The percentage of tax incentive will begin to decline in 2020 (26%), dropping to 22% in 2021 before being entirely phased out at the end of 2022.