By Jesse Stanley, P.E. | Principal, Green Building Tax Incentives
If you or your clients have never claimed the 179D Tax Deduction, now is the time to act, especially for projects completed in 2022 and those wrapping up in 2025. As tax deadlines and statutes of limitation close, building owners, architects, engineers, and designers may miss the chance to claim up to $5.81 per square foot in deductions. The time to act is now, and as a top 179D provider, KBKG’s in-house team is positioned to help with turnkey solutions.
KBKG Insight:
Many firms miss out on 179D simply because they don’t have the right team in place, or assume the process is too complex. Our dedicated team of professional engineers, energy modelers, and government relations experts specializes in navigating these technical and administrative hurdles. We help clients quickly determine eligibility, obtain required allocations for designers of government or non-profit buildings, and deliver audit-ready documentation. For projects placed in service in 2022, time is running out due to the statute of limitations for amending returns. Likewise, 2025 projects can be claimed on original tax returns, but plan now to ensure proper documentation
Background
The 179D Deduction provides a significant tax benefit for energy-efficient commercial buildings and public projects. Designers of government-owned buildings, like schools, hospitals, and municipal facilities, can claim the deduction when their work improves the energy efficiency of the building’s systems.
Claiming 179D requires technical energy modeling based on ASHRAE standards, a certification by a qualified professional engineer, and a signed allocation letter from the government entity for designers. These steps can’t be backdated, and the IRS requires strict adherence to timing and documentation requirements.
KBKG’s multidisciplinary team handles all aspects of the process in-house: from evaluating project specs and modeling building systems, to working directly with government contacts for allocations. We also confirm all reports are prepared in a format that aligns with IRS expectations to withstand scrutiny.
Buildings Completed in 2022 are Running Out of Time – Here’s Why
The Statute of Limitations (SOL) sets the timeframe in which taxpayers can amend a prior year’s return to claim missed deductions like 179D. For most calendar-year filers, the deadline to amend a 2022 return is fast approaching, typically three years from the original filing date, meaning as early as April 15, 2026. Once this window closes, the opportunity to retroactively claim the deduction is lost permanently. This makes it critical for first-time claimants to review past projects now, especially those completed in 2022, to ensure they don’t forfeit valuable deductions simply due to timing.
Conclusion
Whether you’re a building owner or designer, if you’ve never claimed 179D before, don’t wait. The deadlines for claiming 2022 projects are approaching fast, and 2025 planning needs to start now. Working with KBKG means you have experts across engineering, tax, and government relations to guide you through every step.
Contact KBKG today and review your building or designs to ensure all required components are included for a successful 179D claim.
See If You Qualify Today
About the Author
Jesse Stanley, P.E. | Principal, Green Building Tax Incentives
Jesse Stanley, P.E. is a Principal and oversees KBKG’s Green Building Tax Incentives, including the 179D Tax Deduction and the 45L Tax Credit. He has spent over a decade helping Architects, Engineers, and Design Build Contractors, claim the 179D Energy Efficient Commercial Building Tax Deductions for their new and existing building projects across over 2 billion square feet of commercial building space… Read More