179D Energy Efficient Commercial Building Deduction

A Federal Tax Incentive Generating Additional Deductions up to $1.80 per SF

179D Energy Efficient Commercial Building Deduction

A Federal Tax Incentive Generating Additional Deductions up to $1.80 per SF

§179D ENERGY EFFICIENT COMMERCIAL BUILDING TAX DEDUCTION

The Energy Policy Act of 2005 (EPAct) created the §179D Energy Efficient Commercial Building Deduction as a tax incentive to encourage energy efficient design and construction.

The §179D Deduction allows building owners to claim up to $1.80 per square foot for buildings placed in service after January 2006. In the case of a taxable year beginning after 2020, the $1.80 per square foot will be adjusted by inflation ($1.82 for 2021 and $1.88 for 2022).

To qualify, newly constructed or renovated buildings must meet or exceed the ASHRAE standards for HVAC, building envelope and interior lighting.

ELIGIBILITY

The §179D Deduction is available to commercial building owners as well as engineers, architects, and design contractors of government owned buildings.

The building can be newly constructed or retrofitted with system improvements. Parking garages and residential buildings with four or more stories may also be eligible.

  • For commercial building owners, the project must be completed on or after 2006.
  • For designers of government owned buildings, the deduction can go back to any open tax year (generally three years). The building must be a government project, including:
    • K-12 Schools, higher education, and libraries.
    • Municipal buildings (police, fire stations, courthouses, and more).
    • Public offices, and parking garages, airport terminals.

OUR SERVICE

Our team of engineers and tax professionals will perform free assessments to prequalify your project. Our §179D Deduction service includes:

  • Performing modeling and building inspections.
  • Reviewing construction documents.
  • Facilitating project scope interviews with the design team.
  • Preparing certificates of energy efficiencies.
  • Obtaining allocations from government building owners.
  • Assisting with amended tax returns or filing a change in method of accounting.
  • Coordinating with your tax preparer.
  • Providing complementary audit support.

CASE STUDY

ICS successfully obtained over $4,000,000 in §179D Deductions for a national engineering firm who designed the entire HVAC system for multiple K-12 school buildings and offices.

PROPOSAL REQUEST