The shift toward green construction and design has not only influenced the way engineers and architects look at buildings, but has also changed the way our government is viewing tax codes. In fact, this past year, two important tax codes that involve implementing eco-friendly building practices have been addressed.
Both the 179D energy-efficient tax deduction and the 45L energy-efficient home credit were both extended this year, with 179D receiving a permanent extension from Congress. This significantly impacts the way designers, builders and investors will now look at properties.
179D: A Permanent Win For Energy Efficiency
The energy-efficient tax deduction, also known as 179D, was originally passed under the 2005 Energy Policy and states that any property that has undergone energy-efficient renovations or new construction can qualify for direct tax deductions.
These tax benefits can apply to the owners of the building as well as the architects, engineers or related firms who were involved with the designs or construction.
Some of the upgrades or built-in features that qualify for 179D include:
- Hot water systems
- Building envelope systems
- Heating, ventilation and air conditioning (HVAC)
- Interior lighting systems
- Insulation in ceilings, walls, floors and roofs
- Lighting sensor and controls
If you’re a property owner or part of a firm that has been involved with green construction, give our team of tax experts a call at (561) 257-3436. Our team of professionals will ensure that you are claiming all qualified elements by performing an in-depth study of your projects and property.
45L: In The Green Until 2021
If you’re a property owner, contractor or builder who has reduced the energy consumption of a property by 50%, you are eligible to receive up to $2,000 for each unit of property that meets these standards through 2021. These are direct dollar-for-dollar tax credits that you can receive for this work.
Some of the standards a project must meet to qualify include:
- Buildings three stories or less above ground (not including below-grade parking)
- Must be built on the territory in the United States
- The property must meet construction standards based on those set by the 2006 International Energy Conservation Code (IECC)
- It has to be completed between August 8, 2005, and December 31, 2020
- Construction can include “substantial” rehabilitation and reconstruction
Changes to windows, roofs or wall insulation, the foundation of the building, air conditioning, gas furnace, etc. can all reduce the amount of energy a certain building consumes. As long as the project reduced energy consumption by 50%, you may be able to receive these credits.
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If you want to learn more about 179D and 45L, our team of tax specialists can help answer all your questions. We have worked with many companies in numerous industries to evaluate if they qualify for these tax codes. We will make sure you secure all the credits and deductions you can potentially qualify for so you don’t miss out on any savings. Set up your free initial consultation by calling (561) 257-3436.