Go green, save green
179D is a tax incentive that is available for newly constructed or renovated buildings that have installed energy-saving elements. This tax deduction provides tax-saving benefits for commercial building owners, as well as architectural and design firms that have worked on projects for public agency-owned facilities.
Originally passed under the 2005 Energy Policy, the 179D tax provision allows a tax deduction of up to $5 per square foot for both new and existing buildings.
Here Are Some of Our Clients' Success Stories:
Commercial Building Owners
Total Deduction:
$7 MM
Project Types Include:
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Architects & Designers
Total Deduction:
$11.2 MM
Project Types Include:
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We are excited to announce that after years of legislation 179D & 45L have been extended
How Do You Qualify Based on Your Industry?
The 179D Tax Deduction is for Architects, Engineering Firms, Commercial Building Owners, and Construction Firms. This deduction is especially profitable for renovation projects, usually performed by these professional teams.
Qualifying Energy-Savings Are All Around You
It can be difficult to figure out if your building’s energy efficiency improvements qualify for this deduction. National Tax Group makes it easy with an in-depth study of your project and how it qualifies.
EPAct 179D studies are applicable for the following:
- New construction of commercial buildings
- Upgrades, renovations and retrofits, improvements to lighting, HVAC, envelope (roof, insulation, and windows), energy performance contracting, CRA redevelopment
- LEED-certified buildings
- Green/energy-efficient buildings
- Residential apartment buildings
- Public buildings
Impacts of IRA on Section 179D Inflation Adjustments (Notice 2022-61):
| TAX YEAR | BEFORE JAN 1, 2021 | ON OR AFTER JAN 1, 2021 | ON OR AFTER JAN 1, 2022 | ON OR AFTER JAN 1, 2023** | ON OR AFTER JAN 1, 2024** |
| MAXIMUM FULL AMOUNT ALLOWED | $1.80 | $1.82 | $1.88 | $5.36 | $5.65 |
| MAXIMUM PARTIAL AMOUNT ALLOWED | $0.60 | $0.61 | $0.63 | $1.07 | $1.13 |
Section 179D: A timeline
Here’s a detailed timeline of all the IRS notices released impacting Section 179D:
Other essential resources on Section 179D
- Department of Energy List of Approved Energy Modeling Software
- IRS Form 3115, Change in Accounting Method
- Tax Court Case: Michael Johnson, et al v. Commissioner, 160 T.C. No. 2.
In a T.C. Opinion, the Tax Court has held that a heating, ventilation and air conditioning (HVAC) contractor is entitled to a $305k IRC Section 179D (deficiency amount) deduction because the HVAC system the company installed in a Veterans Administration (VA) building constituted “energy efficient commercial building property” under IRC Section 179D(c)(1) and a VA official had properly allocated the available IRC Section 179D deduction to the HVAC
TESTIMONIALS
What Our Clients Are Saying
179D Qualification Requirements
179D Qualification Requirements
| Properties Placed in Service 2023-2032 | ||||
|---|---|---|---|---|
| Project Tier | Bonus Requirements | Energy Savings | Base Deduction | Max Deduction |
| Base Tier | None | 25-50% | $0.50/sqft | $1.00/sqft |
| Bonus Tier | Prevailing Wage and Apprenticeship Program | 25-50% | $2.50/sqft | $5.00/sqft |
| Properties Placed in Service 2006-2022 | ||||
|---|---|---|---|---|
| Qualifying Components | Estimated Tax Deduction | |||
| Before 2021 | 2021 | 2022 | ||
| Fully Qualified Property | $1.80/sqft | $1.82/sqft | $1.88/sqft | |
| Partially Qualified Property | Envelope | $0.60/sqft | $0.61/sqft | $0.63/sqft |
| HVAC | ||||
| Lighting | ||||