Section 179D of the Internal Revenue Code provides tax incentives for the construction of energy-efficient commercial buildings. The deduction is available to owners and designers of new or existing buildings that meet certain energy efficiency requirements. The amount of the deduction is based on the percentage of energy savings achieved by the improvements.
The Section 179D deduction is a significant incentive for building owners to invest in energy efficiency. The deduction can save building owners thousands of dollars in taxes, and it can also help to reduce their energy bills. In addition, energy-efficient buildings can help to improve air quality and reduce greenhouse gas emissions.
The Section 179D deduction is available to a wide range of building owners. While the deduction is not available to nonprofits and government entities, a designer can take the deduction of a nonprofit or government building if granted permission from the owner. The deduction is also available to tenants who make improvements to leased space.
To qualify for the Section 179D deduction, buildings must meet certain energy efficiency requirements. The requirements are based on the ASHRAE 90.1 standard, which is a set of guidelines for energy-efficient buildings.
The amount of the Section 179D deduction is based on the percentage of energy savings achieved by the improvements. The deduction is available for up to $5.00 per square foot of energy savings.
The Section 179D deduction is a valuable tax incentive for building owners who are interested in improving the energy efficiency of their buildings. The deduction can save building owners thousands of dollars in taxes, and it can also help to reduce their energy bills and improve air quality.
Recent Expansions to Section 179D
In 2022, Congress expanded the Section 179D deduction. The expansion increased the amount of the deduction and made it available to a wider range of building owners.
The expansion of Section 179D is a significant step towards encouraging the construction of energy-efficient buildings. The expansion will make it easier for building owners to invest in energy efficiency, and it will help to reduce our nation’s reliance on fossil fuels.
Conclusion
Section 179D is a valuable tax incentive for building owners who are interested in improving the energy efficiency of their buildings. The deduction can save building owners thousands of dollars in taxes, and it can also help to reduce their energy bills and improve air quality.
The Section 179D deduction is available to a wide range of building owners, and it has been recently expanded to make it even more accessible. If you are considering investing in energy efficiency for your building, be sure to take advantage of the Section 179D deduction. Our tax experts at National Tax Group are here to help. Please contact us today for more information.