The 179D Energy Efficient Commercial Buildings Tax Deduction
What is the 179D tax deduction?
179D is a federal tax deduction for commercial buildings owners which can amount up to $5.00/sq.ft. for each building that qualifies. It applies to buildings with recently installed or planned upgrades which improve its energy efficiency. Heating, cooling, ventilation, hot water, lighting, and building envelope projects can all qualify.
Who can claim the 179D deduction?
The deduction can be claimed by building owners who plan to implement improvements or design choices which reduce a building's system energy use by 25% or more. Both existing buildings undergoing retrofit improvements and new construction projects qualify. Additionally there are alternative methods for government buildings, buildings owned by tax exempt organizations, and other special case buildings to capitalize on 179D.
How much will the amount of my deduction be?
The final amount of the tax deduction depends on the amount of energy reduction that building improvements achieve along with a few other factors. The deduction amount is based on a sliding scale from $0.50-$1.00/sq.ft. and depends on how far the energy reductions extend beyond the minimum 25%. This sliding scale and potential value of the deduction increases to $2.50-$5.00/sq.ft. if additional prevailing wage requirements are met as well. The tax deduction claimed cannot exceed the total project cost.
How do I qualify the 179D deduction for my building?
In order to qualify for this tax deduction, a qualified professional (typically a professional engineer or other accredited building expert) must model and evaluate the energy use reduction achieved by the building system improvements and create the required documents for filing. Bolder Energy Engineers has several such approved professionals who can guide you through this process at any stage.
Email info@bolderee.com for more information or click the Contact Us button below.
179D is a federal tax deduction for commercial buildings owners which can amount up to $5.00/sq.ft. for each building that qualifies. It applies to buildings with recently installed or planned upgrades which improve its energy efficiency. Heating, cooling, ventilation, hot water, lighting, and building envelope projects can all qualify.
Who can claim the 179D deduction?
The deduction can be claimed by building owners who plan to implement improvements or design choices which reduce a building's system energy use by 25% or more. Both existing buildings undergoing retrofit improvements and new construction projects qualify. Additionally there are alternative methods for government buildings, buildings owned by tax exempt organizations, and other special case buildings to capitalize on 179D.
How much will the amount of my deduction be?
The final amount of the tax deduction depends on the amount of energy reduction that building improvements achieve along with a few other factors. The deduction amount is based on a sliding scale from $0.50-$1.00/sq.ft. and depends on how far the energy reductions extend beyond the minimum 25%. This sliding scale and potential value of the deduction increases to $2.50-$5.00/sq.ft. if additional prevailing wage requirements are met as well. The tax deduction claimed cannot exceed the total project cost.
How do I qualify the 179D deduction for my building?
In order to qualify for this tax deduction, a qualified professional (typically a professional engineer or other accredited building expert) must model and evaluate the energy use reduction achieved by the building system improvements and create the required documents for filing. Bolder Energy Engineers has several such approved professionals who can guide you through this process at any stage.
Email info@bolderee.com for more information or click the Contact Us button below.
Solar Tax Credits
The Inflation Reduction Act of 2022 increased the solar tax credit to 30% (of the gross solar system cost) and extends it until the end of 2032. The Residential Clean Energy Credit, also known as the Investment Tax Credit (ITC), is a tax incentive worth 30% gross solar system cost. To be eligible, you must own the system by purchasing your solar via cash or a solar loan (lease or PPA financing cannot claim the tax credit) and you must have an income tax liability, which is what this incentive reduces.