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Section 179D: An Important Tax Break for Energy Efficient Buildings

March 21, 2016

The Section 179D deduction is a little-known tax break for businesses, but it can provide huge savings- Don’t miss out!

Has your business considered energy efficiency as part of your operational plan? You might be interested in a program designed to offset the cost of qualifying energy-efficient improvements to commercial buildings, called the Section 179D energy tax deduction. This deduction allows taxpayers to take an immediate expense for the cost of property, an expense that would under normal circumstances be recovered through depreciation over as many as 39 years.

Who Qualifies?

  • Building owners and lessees who make energy efficient improvements to their commercial buildings.
  • Designers of government buildings such as the engineer, contractor, designer, architect, environmental consultant or energy services provider.

What improvements qualify for the deduction?

To qualify for the deduction, energy-efficient improvements:

  • Must reduce total annual energy and power costs with respect to the interior lighting, heating, cooling, ventilation and hot water systems by 50%.
  • Must be made on commercial buildings (of any size) or apartments (for lease) that are at least four stories.

Read our article, “‘Going Green’: The Section 179D Federal Energy Tax Deduction” to learn more about the deduction, how to claim it, and the timeframe during which the work must be completed.

Questions? Contact any member of our Tax Services Team.

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