Section 179D Analysis
The Internal Revenue Code Section 179D, titled Energy Efficient Commercial Building Deduction, provides taxpayers a tax deduction for the cost of the installation of energy-efficient property (EEP) in the system categories of lighting, HVAC, and building envelope. The building, in which the EEP is installed, may qualify for a deduction, for federal income tax purposes, of up to $1.80 per square foot ($0.60 per square foot for each system) if the EEP meets certain efficiency tests. The deduction is available for newly constructed or energy renovated commercial buildings as well as apartment buildings of 4 stories or more. Commercial property owners who pay taxes can claim the benefit of the deductions; Governmental entities which own buildings may allocate the deductions to the designer of the EEP.
Qualifying for the section 179D deductions requires an independent, third party firm to evaluate the building, confirm the energy savings and certify the qualification. We have extensive experience working with and assisting building owners, government agencies, designers, and their advisors to understand the opportunity and the filing requirements in order to secure the maximum allowable deduction for federal income tax purposes.