SECTION 179D – COMMERCIAL BUILDINGS ENERGY-EFFICIENCY TAX DEDUCTION

Section 179D Commercial Building Energy-Efficient Tax Deduction is now permanent, offering tax benefits for architects, engineering, and construction companies. Before claiming the deduction, corporations must follow time and contract criteria.

One of the most critical aspects of building a new home or remodeling an existing one is ensuring that it meets local and federal guidelines. Section 179D Tax Deduction is an excellent way to encourage long-term sustainability while offering incentives to build green. These tax deductions provide monetary awards for those who meet energy codes, eco-friendly guidelines, and green building standards.

You may be eligible for a tax deduction of up to $1.80/SF or a partial tax deduction of $0.60/SF for lighting, HVAC, and building envelope upgrades that meet the requirements of section 179D under the Energy Policy Act (EPAct). As a result, you can have significant cost savings by qualifying for this tax deduction.

Source – https://www.energy.gov/eere/buildings/179d-commercial-buildings-energy-efficiency-tax-deduction

SECTION 45L – ENERGY-EFFICIENT HOME CREDIT

The Emergency Economic Stabilization Act of 2008 also included the Energy Efficient Home Credit, which provided a $2,000 tax credit per dwelling unit to developers of energy-efficient structures constructed after August 8, 2005. A residential unit’s heating and cooling energy consumption should be lower than the specific 2004 energy criteria. Given how much current energy rules have changed in the last five years, many developers are already building to specifications that would qualify for this credit. If the form is revised before the three-year federal statute of limitations expires, there is still time to claim any missing tax credits. All apartment complexes, residential condominiums, and production house developments built on or after August 8, 2005, should be evaluated for potential energy tax credits.

SECTION 48 – ENERGY TAX CREDIT AND GRANTS

The Section 48 Energy Tax Credit offers a 30% tax credit to individuals that actively invest in solar energy. A 10% credit is given to those who purchase qualified stationary microturbine power plants, certain geothermal equipment and heat pumps, and certain combined heat and power or cogeneration systems (Applies to property installed after December 31, 2005, but before January 1, 2017). There are currently incentives that allow you to get a federal grant in lieu of tax credits for businesses that do not require tax credits. Section 48 property has a five-year tax recovery period, with a potential bonus depreciation deduction of 50% if placed in operation in a qualified year. Businesses that get the Section 48 tax credit can often use a cost segregation study to increase their allocation to property that qualifies for these benefits while speeding up the depreciation on other assets.

SOURCE

1. Energy Efficiency & Renewable Energy – 179D Commercial Buildings Energy-Efficiency Tax Deduction – https://www.energy.gov/eere/buildings/179d-commercial-buildings-energy-efficiency-tax-deduction

2. Energy Efficiency & Renewable Energy – Tax Incentives for Energy-Efficiency Upgrades in Commercial Buildings

https://www.energy.gov/eere/buildings/tax-incentives-energy-efficiency-upgrades-commercial-buildings

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