179D Energy Tax Deduction
The 179D Energy Tax Deduction is commonly called the Commercial Building Deduction or the 179D deduction. It was enacted as part of the Energy Policy Act of 2005, and the provision encourages building owners to increase energy efficiency in new and remodeled buildings by providing an immediate tax deduction for costs incurred.
These costs would otherwise be generally depreciated over 15, 27.5, or 39 years. This is a deduction, not a credit.
In order to qualify, a building must achieve a reduction in energy cost of at least 50 percent in total annual energy and power costs, as compared to a “reference building” that meets the minimum standards. The maximum deduction is $1.80 per square foot.
The energy savings are measured by reference to three main building system categories:
This deduction is also applicable for Design/Build firms on Government Buildings. These buildings include:
Please contact us for a free preliminary benefit analysis.
These costs would otherwise be generally depreciated over 15, 27.5, or 39 years. This is a deduction, not a credit.
In order to qualify, a building must achieve a reduction in energy cost of at least 50 percent in total annual energy and power costs, as compared to a “reference building” that meets the minimum standards. The maximum deduction is $1.80 per square foot.
The energy savings are measured by reference to three main building system categories:
- Interior lighting
- Heating, cooling, ventilation, and hot water systems
- Building envelope
This deduction is also applicable for Design/Build firms on Government Buildings. These buildings include:
- Local Government
- Public Schools: Elementary, Middle, and High Schools
- Airport Authorities
- Parking Garages
- Police and Fire Stations
- State Government
- Colleges and Universities
- Prisons
- Federal Government
- Department of Defense (Ex. Military Bases)
Please contact us for a free preliminary benefit analysis.