How to Navigate the Upcoming ASHRAE Changes to the 179D Tax Deduction

ASHRAE Changes to 179D Tax Deduction

Climate change has been a top priority for the current administration. The Budget Reconciliation Bill is moving quickly through Congress. This is the most comprehensive climate proposal coming out of Washington, tax incentives are changing to promote building with clean energy in mind. Here’s how to navigate the upcoming ASHRAE Changes to the 179D Tax Deduction.

What Are We Watching? The 179D Tax Deduction

Originally passed in 2005, the 179D tax deduction is designed to give tax incentives for companies going green. Architects and commercial building owners can qualify by using their renovation products to save energy. Want to know if you could qualify? 


Here are a few examples:

  • 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


After being in effect for 11 years, this outdated bill officially became part of the tax code after the passing of the COVID Relief Package in December of 2020. With this change, more stringent ASHRAE qualifications followed. While the exact date of when the requirements will be in effect is uncertain, the changes would then still have to undergo final approval from the Department of Treasury and the Department of Energy. 

Here Are a Few ASHRAE Changes We Can Expect

ASHRAE 90.1-2019 Could apply for projects that began construction after Oct. 2021

ASHRAE 90.1-2016 Could apply for projects that began construction after Oct. 2018


These changes will require careful planning in the design and construction of the wattage in the lighting systems being installed. But, thanks to advanced technology, it may be beneficial to look into gadgets like control systems, motion sensors, or bi-level switches that can also help reduce energy use.


Do you think your project can qualify for a tax deduction? Get in touch with one of our 179D tax deduction experts to get a free assessment to see if your properties qualify and tax group services.

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