The recent expansion of Section 179D benefits represents a significant opportunity for owners making energy saving improvements to their buildings, allowing additional tax deductions to be claimed during the year that these systems are implemented.
Benefits can be earned across three key areas:
- Interior lighting systems
- HVAC systems
- Building envelope
By investing in energy-efficient technologies,
building owners can qualify for additional incentives that will:
Accelerate Depreciation
Realize Tax Savings
Expedite Cost Recovery
Lower Project Costs
How Does the Section 179D Evaluation Work?
Step 1: Assess
Get a No-cost Feasibility Assessment
CSSI evaluates your situation to determine whether your property qualifies for 179D tax deductions based on the established energy-efficient criteria and norms.
Step 2: Evaluation
CSSI Thoroughly Reviews 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.
Step 3: Report
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.
FAQs
Learn More About 179D Deductions
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.
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.
Yes, the deduction can be claimed for both new construction and renovations of existing buildings.
The deduction can be claimed by building owners, tenants, or designers of government-owned buildings.
The deduction can be up to $1.80 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.
The deduction applies to three types of systems:
- Interior lighting
- Building envelope (roof, walls, windows, doors)
- Heating, cooling, ventilation, and hot water systems
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.
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.