179D Tax Deduction
Save up to $5.65 per Square Foot for Energy-Efficient Buildings
Reduce Your Income Tax Burden Through Strategic Depreciation
The 179D Commercial Buildings Energy-Efficiency Tax Deduction provides substantial tax benefits for commercial building owners and designers of government, non-profit, religious, and tribal buildings. Created under the Energy Policy Act of 2005 and enhanced by recent legislation, this program now offers up to $5.65 per square foot for qualifying projects placed in service in 2024.
Benefits can be earned across three key areas:
Lighting Systems
Advanced lighting controls and efficient fixtures
HVAC & Hot Water Systems:
Energy-efficient heating, cooling, and water heating
Building Envelope:
Walls, roof, windows, and insulation systems that reduce energy loss
By investing in energy-efficient technologies,
building owners can qualify for additional incentives that will:
Enhance Property Value
Generate Tax Savings
Reduce Operating Cost
Expedite Cost Recovery
How Does the Section 179D Evaluation Work?
No cost feasability assesment.
We evaluate your situation to determine whether your property qualifies for 179D tax deductions based on the established energy-efficient criteria and norms.
We thoroughly review your plans and structures.
Our team then works to uncover any issues that could prevent you from qualifying for or maximizing your deductions, which may include on-site visits.
You receive a full report with detailed recommendations.
Our strategies will show you how to fully leverage available incentives and provide you with all the documentation required to file for and substantiate your credits.
STILL NOT SURE?
Frequently Asked Questions
What is the 179D tax deduction?
The 179D tax deduction is an incentive for designing energy-efficient commercial buildings. Building owners can claim a tax deduction for installing qualifying energy-efficient systems.
What energy systems can qualify for the 179D deduction?
The deduction applies to three types of systems:Interior lightingBuilding envelope (roof, walls, windows, doors)Heating, cooling, ventilation, and hot water systems
Who can claim the 179d deduction?
The deduction can be claimed by building owners, tenants, or designers of government-owned buildings.
What documentation is needed to claim the 179D deduction?
You’ll need certification from a qualified individual (like a licensed engineer or contractor) that the required energy savings have been achieved. This typically involves energy modeling software to demonstrate the energy cost reductions.
What types of buildings qualify for the 179D deduction?
Qualifying buildings include commercial buildings and multi-family residential buildings four stories or higher. This includes offices, retail spaces, industrial buildings, warehouses, and apartment complexes.
How much is the 179D deduction worth?
The deduction can be up to $5 per square foot for buildings that achieve a 50% reduction in energy costs compared to a reference building. Partial deductions of $0.60 per square foot are available for each qualifying system.
Can the 179d deduction be claimed for retrofits or renovations?
Yes, the deduction can be claimed for both new construction and renovations of existing buildings.
How long has the 179d deduction been available??
The 179D deduction was first enacted in 2005 and has been extended and modified several times. It was made permanent in 2020 and expanded in 2022 under the Inflation Reduction Act.
