Our sources report that with the expected passage of the COVID relief bill and fiscal year 2021 omnibus spending package, two key incentives will receive extensions as part of the package.
The Internal Revenue Code (IRC) Section 179D commercial property energy efficiency deduction, which is used for multifamily housing energy efficiency upgrades, will be made permanent and is eligible for improvements meeting above-industry energy-efficiency standards in the year in which the homes are placed in service. The energy-efficiency standards have been updated and the deduction rate is indexed for inflation.
Also, the Internal Revenue Code Section 45L energy-efficient home tax credit of up to $2,000 per unit, will be extended through the end of 2021. An Affordable Housing Credit Improvement Act provision would allow the use of the 45L credit, and 179D deduction without reducing the low-income housing tax credit basis.
We are excited by the savings our clients will see from these two key tax incentives. If you have any questions on this or any of the other commercial tax services we provide, please reach out to our tax professionals at (561) 257-3436.