On Friday, December 20th, President Trump signed and enacted a $1.4 trillion spending package that funds the government for the 2020 fiscal year, averting a second government shutdown for 2019.  Included in the spending bills are numerous tax extenders, including many that had originally expired at the end of 2017. Among these tax breaks are various provisions for energy related tax credits and incentives.

Key energy tax provisions impacting the real estate industry include the following:

  • §45L Energy Efficiency Tax Credits Extended for Multifamily & Residential Developers for 2018 through 2020
    Low-rise apartment developers and homebuilders are eligible for a $2,000 tax credit for each new or rehabbed energy efficient dwelling unit that is first leased or sold by the end of 2020. Taxpayers also have the ability to amend returns to claim missed tax credits from previous years. » Find out if you qualify
  • §179D Energy Efficiency Tax Deductions Extended for Commercial Buildings for 2018 through 2020
    Tax deductions of up to $5 per square foot for energy efficient commercial building property have been extended through the end of 2020. Designers of government-owned buildings remain eligible for these deductions as well. » Find out if you qualify

With almost a 2-year lapse in the §45L tax credits, pursuing tax credits for a 2018 tax year will require amending a 2018 return.  Likewise, designers pursuing §179D tax deductions for 2018 will also need to amend.

Author: CJ Aberin, CCSP

Our technical team has been keeping tabs on the latest updates on the Hill in regards to tax extenders and technical corrections all year long. To look back, view our 2019 Legislative Tax Updates for Real Estate.