Form 8908 - Energy Efficient Home Credit

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Instructions for Form 8908

Department of the Treasury
Internal Revenue Service

(Rev. December 2022)

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

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 isn’t an eligible contractor.

DRAFT AS OF
November 4, 2022

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

Credit extension. The Inflation Reduction Act of 2022
(IRA 2022) extended the energy efficient home credit to
cover qualified new energy efficient homes sold or leased
after 2021 and before 2033.
Credit increase and modification. IRA 2022 also
increased and modified the credit for certain homes sold
or leased after 2022.

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 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 an 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.

What Revision To Use

Use the December 2022 revision of Form 8908 for tax
years beginning in 2022 or later, until a later revision is
issued. Use this December 2022 revision of the
instructions for tax years beginning in 2022 or later, until a
later revision is issued. Use prior revisions of the form and
instructions for earlier tax years. All revisions are available
at IRS.gov/Form8908.

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
Nov 04, 2022

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 2033, for
use as a residence. The home must be certified and meet
certain energy saving requirements. Construction includes
substantial reconstruction and rehabilitation.

Energy Saving Requirements

The credit amount is based on the extent to which each
new energy efficient home meets the energy saving
requirements discussed below.
50% energy efficient standard (for homes sold or
leased before 2023). 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 (for homes sold or
leased before 2023). 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.

Certification

An eligible contractor must obtain a certification that the
dwelling unit meets the requirements of section 45L(c)
before claiming the section 45L credit. For homes sold or
leased before 2023, 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.

DRAFT AS OF
November 4, 2022

Zero Energy Ready Home Program requirement (for
homes sold or leased after 2022). A dwelling unit
meets this requirement if the dwelling unit is certified as a
zero energy ready home under the Zero Energy Ready
Home Program of the Department of Energy as in effect
on January 1, 2023 (or any successor program).
Information about this program is available at
www.energy.gov.

For homes sold or leased after 2022, any additional
guidance issued to address certification will be added to
these instructions at a later date.

Specific Instructions
Line 1

Single-family home requirements (for homes sold or
leased after 2022). A dwelling unit meets these
requirements if the dwelling unit meets:
• The Energy Star Single-Family New Homes National
Program Requirements 3.1;
• The Energy Star Single-Family New Homes Program
Requirements in effect on January 1, 2023, for the
location of the dwelling unit; or
• The Energy Star Manufactured Home National Program
Requirements in effect on January 1, 2023.
Information about Energy Star programs is available at
www.energystar.gov/partner_resources/residential_new.

For each home sold or leased before 2023 that meets the
50% energy efficient standard, the allowable credit is
$2,000.
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 must not
again be considered in determining the energy efficient
home credit. See section 45L(f).

Line 2

Multi-family home requirements (for homes sold or
leased after 2022). A dwelling unit meets these
requirements if the dwelling unit meets:
• The Energy Star Multi-Family New Construction
National Program Requirements in effect on January 1,
2023; or
• The Energy Star Multi-Family New Construction
Regional Program Requirements in effect on January 1,
2023, for the location of the dwelling unit.
Information about Energy Star programs is available at
www.energystar.gov/partner_resources/residential_new.

For each manufactured home sold or leased before 2023
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 must not
again be considered in determining the energy efficient
home credit. See section 45L(f).

Line 3

Prevailing wage requirements (for multi-family
homes sold or leased after 2022). The prevailing wage
requirements with respect to any qualified residence are
that the taxpayer shall ensure that any laborers and
mechanics employed by the taxpayer or any contractor or
subcontractor in the construction of such residence shall
be paid wages at rates not less than the prevailing rates
for construction, alteration, or repair of a similar character
in the locality in which such residence is located as most
recently determined by the Secretary of Labor.
Regulations or other guidance will be issued as
necessary, including regulations or other guidance which
provides for requirements for recordkeeping or
information reporting for purposes of administering these
requirements. Additional guidance issued to address the
prevailing wage requirements will be added to these
instructions at a later date.

The credit is $2,500 for each home sold or leased after
2022 and eligible to participate in the:
• Energy Star Residential New Construction Program that
meets the Single-Family Home Requirements but is not
certified as a Zero Energy Ready Home,
• Energy Star Manufactured New Homes Program that
meets the Single-Family Home Requirements but is not
certified as a Zero Energy Ready Home, or
• Energy Star Multi-Family New Construction Program
that meets the prevailing wage requirements and the
Multi-Family Home Requirements but is not certified as a
Zero Energy Ready Home.
Generally, reduce the expenses incurred in the
construction of each new home by the amount of the
credit. However, do not reduce the expenses when
determining the adjusted basis of a building for purposes
of the low-income housing credit. Also, expenses taken
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Instructions for Form 8908 (Rev. December 2022)

into account for either the rehabilitation credit or energy
credit part of the investment tax credit must not again be
considered in determining the energy efficient home
credit. See sections 45L(e) and (f).

determining the adjusted basis of a building for purposes
of the low-income housing credit. Also, expenses taken
into account for either the rehabilitation credit or energy
credit part of the investment tax credit must not again be
considered in determining the energy efficient home
credit. See sections 45L(e) and (f).

Line 4

The credit is $5,000 for each home sold or leased after
2022 and eligible to participate in the:
• Energy Star Residential New Construction Program and
is certified as a Zero Energy Ready Home,
• Energy Star Manufactured New Homes Program and is
certified as a Zero Energy Ready Home, or
• Energy Star Multi-Family New Construction Program
that meets the prevailing wage requirements and is
certified as a Zero Energy Ready Home.

Line 6

DRAFT AS OF
November 4, 2022

The credit is $1,000 for each home sold or leased after
2022 and eligible to participate in the Energy Star
Multi-Family New Construction Program that is certified as
a Zero Energy Ready Home but does not meet the
prevailing wage requirements.
Generally, reduce the expenses incurred in the
construction of each new home by the amount of the
credit. However, do not reduce the expenses when
determining the adjusted basis of a building for purposes
of the low-income housing credit. Also, expenses taken
into account for either the rehabilitation credit or energy
credit part of the investment tax credit must not again be
considered in determining the energy efficient home
credit. See sections 45L(e) and (f).

Generally, reduce the expenses incurred in the
construction of each new home by the amount of the
credit. However, do not reduce the expenses when
determining the adjusted basis of a building for purposes
of the low-income housing credit. Also, expenses taken
into account for either the rehabilitation credit or energy
credit part of the investment tax credit must not again be
considered in determining the energy efficient home
credit. See sections 45L(e) and (f).

Line 7

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).

Line 5

The credit is $500 for each home sold or leased after
2022 and eligible to participate in the Energy Star
Multi-Family New Construction Program that meets the
Multi-Family Home Requirements but is not certified as a
Zero Energy Ready Home and does not meet the
prevailing wage requirements.

Partnerships and S corporations report the above
credits on line 7. All other filers figuring a separate credit
on earlier lines also report the above credits on line 7. All
others not using earlier lines to figure a separate credit
can report the above credits directly on Form 3800, Part
III, line 1p.

Generally, reduce the expenses incurred in the
construction of each new home by the amount of the
credit. However, do not reduce the expenses when

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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.

Instructions for Form 8908 (Rev. December 2022)

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