The Fate of the §179D Energy Efficient Commercial Building Deduction and the §45L Energy Efficient Home Credit

The Fate of the §179D Energy Efficient Commercial Building Deduction and the §45L Energy Efficient Home Credit

Author: Alexander Bagne, JD, CPA, MBA, CCSP

Almost daily, I receive questions about the status of the §179D Energy Efficient Commercial Building Deduction and the §45L Energy Efficient Home Credit. These two incentives encourage sustainable construction practices as well as stimulate the economy and create jobs. While both incentives lapsed since the end of 2017, they have received bipartisan support with draft legislation to extend them through 2020. This was after a Senate Finance Committee established a special task force to evaluate these incentives, which made a favorable recommendation to extend them, yet they still remain expired.

Earlier this week, more than five dozen groups from a diverse group of industries signed a letter calling upon our congressional leaders to address numerous temporary tax provisions, which includes the 179D and 45L energy efficiency incentives. The letter states: “Uncertainty regarding the status of these worthwhile incentives has created confusion for the numerous industry sectors that utilize these tax incentives and has threatened thousands of jobs in the U.S. economy. The continued uncertainty regarding eventual congressional action on tax extenders is undermining the effectiveness of these incentives and stands as a needless barrier to additional job creation and economic growth.”

As a board member and past president of the American Society of Cost Segregation Professionals (ASCSP), one of the many groups supporting the tax extension, I have the honor of participating in the discussions with other like-minded proponents.

As far as my thoughts…the 179D and 45L incentives need to be bundled with numerous other expired or expiring tax incentives to pass, and that’s a good thing. This means that there are more organizations collectively working together to extend these two incentives as well as all other temporary incentives. If I were to place a wager, I’d definitely bet that these incentives will be extended. Stay tuned…

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