8908 Instructions for Form 8908

Instructions for Form 8908

Department of the Treasury
Internal Revenue Service

(Rev. February 2020)

Energy Efficient Home Credit
Section references are to the Internal Revenue Code
unless otherwise noted.

General Instructions
Future Developments

For the latest information about developments related to
Form 8908 and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form8908.

What’s New

The energy efficient home credit was extended to cover
qualified new energy efficient homes sold or leased in
2018, 2019, and 2020.
Form 8908 and its instructions will no longer be
updated annually. Instead, they'll only be updated when
necessary. Use these instructions and the Form 8908
(Rev. February 2020) for tax years beginning after 2017.
For previous tax years, see the applicable Form 8908 and
instructions. For example, use the 2017 Form 8908 with
the 2017 Instructions for Form 8908 for tax year ending
December 31, 2017.
For 2018 claims, use Form 8908 (Rev. February
TIP 2020) because it has lines 1a through 2b available
if needed.

Purpose of Form

Eligible contractors use Form 8908 to claim a credit for
each qualified energy efficient home sold or leased to
another person during the tax year for use as a residence.
The credit ($2,000 or $1,000) is based on the energy
saving requirements of the home. The credit is part of the
general business credit.
Partnerships and S corporations must file this form to
claim the credit. All other taxpayers aren’t required to
complete or file this form if their only source for this credit
is a partnership or S corporation. Instead, they can report
this credit directly on line 1p in Part III of Form 3800,
General Business Credit.
See section 45L for more information.

Who May Claim the Credit

Eligible contractors may claim the credit for new energy
efficient homes that are acquired by sale or lease by an
individual from that contractor during the tax year for use
as a residence.

Definitions
Eligible Contractor

An eligible contractor is the person that constructed a
qualified energy efficient home (or produced a qualified
energy efficient home that is a manufactured home). A

Feb 20, 2020

person must own and have a basis in the qualified energy
efficient home during its construction to qualify as an
eligible contractor with respect to the home. For example,
if the person that hires a third party contractor to construct
the home owns and has the basis in the home during
construction, the person that hires the third party
contractor is the eligible contractor and the third party
contractor is not an eligible contractor.

Qualified New Energy Efficient Home

A qualified new energy efficient home is a dwelling unit
located in the United States, whose construction is
substantially completed after August 8, 2005, and sold or
leased to another person after 2005 but before 2021, for
use as a residence. The home is also required to be
certified and meet certain energy saving requirements.
Construction includes substantial reconstruction and
rehabilitation.

Energy Saving Requirements

The amount of the credit is based on the extent to which
each new energy efficient home meets the energy saving
requirements discussed below.
50% energy efficient standard. The credit is $2,000 for
a dwelling unit that is certified to have an annual level of
heating and cooling energy consumption at least 50%
below the annual level of heating and cooling energy
consumption of a comparable dwelling unit and has
building envelope component improvements that account
for at least 1/5 of the 50% reduction in energy
consumption. A manufactured home meeting the
requirements described above and the Federal
Manufactured Home Construction and Safety Standards
(FMHCSS) requirements (see 24 C.F.R. part 3280) is also
eligible for the $2,000 credit.
Comparable dwelling unit. A comparable dwelling
unit:
• Is constructed in accordance with the standards of
chapter 4 of the 2006 International Energy Conservation
Code as such Code (including supplements) was in effect
on January 1, 2006;
• Has air conditioners with a Seasonal Energy Efficiency
Ratio (SEER) of 13, measured in accordance with 10
C.F.R. 430.23(m); and
• Has heat pumps with a SEER of 13 and a Heating
Seasonal Performance Factor (HSPF) of 7.7, measured in
accordance with 10 C.F.R. 430.23(m).
30% energy efficient standard. The credit is $1,000 for
a manufactured home that doesn’t meet the 50% energy
saving requirement but is certified to have an annual
level of heating and cooling energy consumption at least
30% below the annual level of heating and cooling energy
consumption of a comparable dwelling unit (discussed
above) and:
• Meets FMHCSS requirements, and

Cat. No. 66390D

• Has building envelope component improvements that
account for at least 1/3 of the 30% reduction in energy
consumption, or
• Meets the current requirements established by the
Administrator of the Environmental Protection Agency
under the Energy Star Labeled Homes program.
Heating and cooling energy and cost savings must be
calculated using the procedures described in Residential
Energy Services Network (RESNET) Publication 001-16,
or an equivalent calculation procedure. You can access
RESNET publications at http://staging.resnet.us/
professional/standards/tax_credits.

Reduce the expenses incurred in the construction of
each new home by the amount of the credit. Expenses
taken into account for either the rehabilitation credit or
energy credit part of the investment tax credit may not
again be considered in determining the energy efficient
home credit. See section 45L(f).

Line 2

For each manufactured home that meets the 30% energy
efficient standard, the allowable credit is $1,000.
Reduce the expenses incurred in the construction of
each new home by the amount of the credit. Expenses
taken into account for either the rehabilitation credit or
energy credit part of the investment tax credit may not
again be considered in determining the energy efficient
home credit. See section 45L(f).

Certification

An eligible contractor must obtain a certification that the
dwelling unit meets the requirements of section 45L(c)
from an eligible certifier before claiming the section 45L
credit. The certification will be treated as satisfying the
requirements of section 45L(c) if all the construction has
been performed in a manner consistent with the design
specifications provided to the eligible certifier and the
certification contains all of the information required by
section 3 of Notice 2008-35, available at IRS.gov/irb/
2008-12_IRB#NOT-2008-35, or, for manufactured homes,
section 3 or section 4 of Notice 2008-36, available at
IRS.gov/irb/2008-12_IRB#NOT-2008-36.

Line 3

Enter total energy efficient home credits from:
• Schedule K-1 (Form 1065), Partner’s Share of Income,
Deductions, Credits, etc., box 15 (code P); and
• Schedule K-1 (Form 1120-S), Shareholder’s Share of
Income, Deductions, Credits, etc., box 13 (code P).
Partnerships and S corporations report the above
credits on line 3. All other filers figuring a separate credit
on earlier lines also report the above credits on line 3. All
others not using earlier lines to figure a separate credit
can report the above credits directly on Form 3800, Part
III, line 1p.

Specific Instructions
Line 1

For each home that meets the 50% energy efficient
standard, the allowable credit is $2,000.
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws
and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103.

h

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for individual and business taxpayers filing this form is approved under OMB control number 1545-0074 and 1545-0123
and is included in the estimates shown in the instructions for their individual and business income tax return. The
estimated burden for all other taxpayers who file this form is shown below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 hr., 9 min.
12 min.
14 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

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Instructions for Form 8908 (Rev. February 2020)