The Bipartisan Budget Act of 2018 may Retroactively Extend Energy Efficiency Incentives



Alex Bagne, JD, CPA, MBA, CCSP – President of ICS Tax, LLC

The Bipartisan Budget Act of 2018 may retroactively extend §179D Energy Efficient Commercial Building Deduction as well as the §45L Energy Efficient Home Credit, and it might happen soon!!!


§179D Energy Efficient Commercial Building Deduction allows taxpayers who constructed new buildings or made improvements to existing ones between 2006 and 2016 can take an immediate deduction of up to $1.80/SF for investments in efficient lighting systems, HVAC and hot water systems, and the building envelope. For architects, engineers, and contractors who design public buildings, a special rule allows them to take the deduction for themselves. As a companion tax incentive but for residential properties, the §45L Energy Efficient Home Credit allows eligible developers to claim a $2,000 tax credit for each newly constructed or substantially reconstructed qualifying residence. Both of these incentives expired as of December 31, 2016.


This Act is the Senate’s version of the budget, which needs to be passed before February 8, 2018, and includes retroactive extension of both the §179D Deduction and the  §45L credit through December 31, 2017. If passed by the Senate, it would then need to be passed by the House, which is not a forgone conclusion as the House could reject it or other issues could create another shutdown and a revised bill. We should hear official word soon.


Out of all the buildings and residences that qualify for these hugely beneficial incentives, very few taxpayers are taking the steps necessary to claim them. ICS can provide a free analysis to determine if either of these incentives are feasible, and if so, provide the necessary energy modeling, third-party certifications, and other assistance to benefit from them. For a free consultation, please contact an ICS Tax representative.


ICS Tax, LLC (ICS) is a consulting firm providing innovative tax planning strategies. ICS collaborates with taxpayers and their tax professionals to identify credits and incentives that reduce tax liabilities and increase profitability. ICS provides nationwide service through its offices located throughout the country.