179D Tax Deduction
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Qualify for the
179D Tax Deduction
What is the 179D Tax Deduction?
The Energy-Efficient Commercial Buildings Tax Deduction originally made effective on 1/1/2006, is a significant financial incentive geared towards:
• Building owners (commercial or multifamily)
• Tenants making improvements
• Architects, engineers, and other designers of government buildings
To qualify, newly constructed buildings along with improvements to existing buildings must meet or exceed certain energy reduction requirements. Recent tax legislation extended the Energy Efficient Commercial Buildings Deduction, offering a tax deduction of up to $1.80/sf to those investing in energy efficient improvements placed in service after December 31, 2005.
What are the Benefits of the 179D Tax Deduction?
Size of Improvement
Partial Tax Deductions For...
Full Tax Deduction
$15K - $30K
$30K - $60K
$90K - $180K
Who are Ideal Candidates for the 179D Tax Deduction?
Unlike most deductions, which are based on the amount spent, this deduction is primarily based on affected square footages. Ideal candidates will generally have improvements with a square footage of at least 50,000 square feet. A wide range of improvements, from simple lighting retrofits to full-scale construction projects, qualify for this timely tax break. Other great candidates include regional or national chains with multiple locations.
What is the Process for Claiming 179D Tax Deduction?
The basis for developing and supporting this deduction is a detailed engineering analysis, as prescribed by the IRS. Our multi-disciplinary team of engineers and tax experts will ensure that you obtain the maximum available deductions while following IRS guidance to properly certify the tax deductions. Additionally, our team can help you claim deductions that were missed from prior years.
What Improvements are Eligible for the 179D Deduction?
Taxpayers that invest in ground-up construction or in improvements to their existing buildings are potentially eligible for 179D deductions. Eligible improvements must reduce energy use by making investments in any of the following categories: a building’s envelope, HVAC, and/or interior lighting systems. There are different ways to pursue a deduction and all require comparison to the ASHRAE Standards and certification by a qualified individual.
179D Tax Insights
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BREAKING NEWS: Senate Finance Committee Launching Bipartisan Taskforces on Tax Extenders Including Green Building Tax Incentives
Update as of 5/23/2019: The House Ways and Means Committee is currently putting together a package to address tax extenders such as the 45L tax credit and 179D tax deduction. Currently, a markup on tax extenders is expected sometime in June. BREAKING NEWS from 5/15/2019: The Senate Finance Committee launched bipartisan taskforces to address tax … Read More