Frequently Asked Questions for Home Energy Raters About the Energy Efficiency Tax Credit for New Homes

This page is presented to provide general information on the new federal tax credit and is not intended to be an interpretation of eligibility for the tax credit. Please consult with a qualified tax advisor to discuss eligibility.

Q: In general what allows a home to qualify for the tax credit?

A: To meet the energy saving requirements, a home must use no more than 50% of the energy used by a home built to 2004 International Energy Conservation Code (IECC) standards.

Q: How does a rater determines if a home qualifies for the tax credit?

A: The only way to determine if a home will qualify for the tax credit is to have an analysis done using one of the approved IRS software programs. To find the most current list of these programs, click on IRS Eligible Software Programs.

Q: Who can qualify for the new homes tax credit?

A: Under the provision for energy efficient homes tax credit, an eligible contractor who constructs a qualified new energy efficient home may qualify for the credit. For specific qualifications to be eligible for the tax credit please consult with a qualified tax advisor.

Q: What qualifies as a new energy efficient home?

A: The home qualifies for the credit if:

It is located in the United States;
Its construction is substantially completed after August 8, 2005;
It meets the statutory energy saving requirements, and
It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2009, for use as a residence

Q: Do homes eligible for the Energy Star label also meet the requirements for the tax credit?

A: No. The requirements to meet Energy Star and the tax credit are different. Qualification for Energy Star covers all energy use in a house, including water heating, lighting and appliances, while requirements for the tax credit only include space heating and cooling.

Q: What does an eligible certifier (home energy rater) need to sign and give to the builder for verification for the tax credit?

A: An eligible certifier needs to sign the following statement on every home they are verifying for the tax credit:

"Under penalties of perjury, I declare that I have examined this certification, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this certification are true, correct, and complete."

Q: What is the time period in which the tax credit can be claimed?

A: To qualify for the credit, homes must be acquired from the eligible contractor after December 31, 2005, and before January 1, 2010

Q: Can a homeowner apply for the tax credit?

A: No, only eligible contractors can apply for the tax credit.

Q: Can homes be verified for the tax credit using the "sampling" method?

A: Yes. The IRS allows sampling as long as the builder builds at least 85 homes a year and the eligible certifier (home energy rater) follows the current Environmental Protection Agency's ENERGY STAR Homes Sampling Protocol Guidelines. Of course the certifier must also sign the required statement certifying the home's compliance.

Q: Can multi-family homes be eligible for the tax credit?

A: Yes. The IRS defines all homes are eligible for the tax credit as long as the building is not more than three stories above grade in height.

Q: The IRS rules states that the tax credit is $2,000 per qualifying dwelling unit. How does the IRS define a "dwelling unit"?

A: The IRS defines a dwelling as a "single unit providing complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking and sanitation."

Q: Are there any insurance requirements for individuals performing the analysis for the tax credit?

A: Yes. RESNET requires that the rating firm/individual must carry professional liability insurance in the amount of least $500,000 in professional liability. The person who is authorized to bind the company must sign and submit to RESNET the following:

"Under the penalties of perjury, I declare that _______ carries a minimum of $500,000 in professional liability. I also acknowledge that if a rater inaccurately presents facts in support of the certification of the tax credit it could result up to and including RESNET removing its accreditation as a tax credit certifier."

This declaration must be signed and sent to RESNET prior to the certification of any homes for the tax credit.

Q: How can a rater obtain the professional liability insurance coverage required by the IRS?

A: One option is to apply for insurance through RESNET's Insurance Program, administered by Lockton Risk Management. For more information, call 1-800-806-0263, or click on www.locktonaffinity.com/resnet.

Q: Does a rater have to carry the RESNET Insurance Program?

A: No. Raters are not required to have the RESNET coverage. Any professional liability coverage will be accepted.

Q: Does RESNET receive compensation for raters purchasing the RESNET Insurance Program?

A: No. The RESNET rater coverage is a service to its rater members. RESNET receives no compensation for the policy coverage.

Q: Can an eligible certifier (home energy rater) sign the declaration verifying a home's eligibility for the tax credit, or does the rater's provider have to sign the declaration?

A: The certified rater can sign the declaration.

Q: What's the difference between a tax credit and tax deduction?

A: Tax deductions reduce tax payer's overall taxable income with the value of the deduction dependent on the payer's tax bracket. Tax credits on the other hand reduce the amount of tax a taxpayer owes dollar for dollar. Tax credits are more economically powerful than deductions.