Form 8908 Instructions: How to Fill Out the Form

Eligible contractors use Internal Revenue Service (IRS) Form 8908, Energy Efficient Home Credit, to claim a tax credit for building and selling qualifying new energy-efficient homes. This tax incentive is for homes acquired by a resident after construction or substantial reconstruction is complete. The credit encourages the development of properties that meet specific energy-saving benchmarks.

Determining Eligibility to File Form 8908

To file Form 8908, the filer must be an “eligible contractor,” defined by the IRS as the person who constructed or substantially reconstructed the home. This is the primary builder, developer, or manufacturer who owned the property and had a basis in it during construction before it was sold or leased.

The property itself must be a “qualifying new energy-efficient home.” It must be located in the United States and acquired by an individual for use as a residence after December 31, 2022, and before January 1, 2033. A requirement is that the home must meet specific energy-saving standards.

The home must be certified by an authorized, independent certifier to confirm it meets the requirements of the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR Residential New Construction program or the Department of Energy’s (DOE) Zero Energy Ready Homes program. This certification is required for eligibility.

Information and Documentation Needed

A contractor must gather specific information to complete the form. The filer will need their business name and taxpayer identification number (TIN). For each property being claimed, the full physical address and the date the home was acquired by the resident are required.

A certification for each home is required. This certificate must be prepared by a qualified certifier who is not related to the contractor and must declare, under penalties of perjury, that the home meets the applicable energy-saving requirements. The certification determines the credit amount.

For single-family and multifamily homes, the credit amounts are:

• $5,000 if the home meets DOE Zero Energy Ready Home standards.
• $2,500 if the home meets ENERGY STAR standards.

For multifamily projects, these amounts are only available if prevailing wage requirements are met. If not, the base credits are $1,000 for Zero Energy Ready homes and $500 for ENERGY STAR homes.

Step-by-Step Guide to Completing Form 8908

Form 8908 is divided into two parts. In Part I, you will list the details for each qualifying home and calculate the credit. Part II is used to provide information about the certifier(s) who verified the home’s energy standards.

In Part I, you will input each property’s full address, certification date, and the date the home was acquired. You must also indicate the type of home and the corresponding credit amount based on the energy standards it meets and whether prevailing wage requirements apply.

After listing all individual properties, you will sum the credit amounts from each home. This final figure represents the total Energy Efficient Home Credit the contractor is eligible to claim for the tax year.

Filing the Form and Claiming the Credit

Form 8908 is not filed as a standalone document; it must be attached to the contractor’s annual income tax return. This could be Form 1040 for sole proprietors, Form 1120 for corporations, or Form 1065 for partnerships. The filing deadline for Form 8908 coincides with the due date of the primary tax return, including extensions.

The credit calculated on Form 8908 is a component of the General Business Credit and must be carried over to Form 3800, General Business Credit. However, partners and S corporation shareholders whose only source for this credit is from a partnership or S corporation can report the credit directly on Form 3800 without filing Form 8908.

Form 3800 is used to aggregate various business credits and calculate any limitations on how much can be used to offset tax liability in a given year. Any unused portion of the credit may be carried back to the previous tax year or carried forward to future years, subject to specific rules.