By David M. Desmarais
By Daniel M. Andrea
By Moshe Golden
By Christopher Parnagian
Unlock tax savings with Section 179D for energy-efficient commercial buildings
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The Section 179D Energy-Efficient Commercial Building Tax Deduction applies to the design and installation of "green" building incentives in areas of interior lighting, HVAC, hot water, or building envelope systems in commercial buildings.
The Federal Energy-Efficient Commercial Building Deduction can potentially save building owners and lessees who make energy efficient improvements thousands. Designers of government-owned buildings such as architects, engineers, contractors, environmental consultants or energy services providers are also eligible to collect the credit for new construction or renovations that meet the qualifications below.
Qualifying commercial buildings include:
Qualifying government buildings include:
Here is a summary of 179D Tax deductions from the Office of Energy Efficiency & Renewable Energy.
* Savings refer to the reduction in the energy and power costs of the combined energy for the interior lighting, HVAC, and hot water systems as compared to a reference building that meets the minimum requirements of ASHRAE Standard 90.1-2007 for properties placed in service on or before December 31, 2020. Savings percentages based on IRS Notice 2012-26.
** Not to exceed cost of qualifying property
*** The tax deduction is prorated depending on the reduction in Lighting Power Density (LPD). See IRS Notice 2006-52 for the definition of "applicable percentage."
Laura H. Yalanis
Paul Nadeau, Jr.