In some exciting news, on Tuesday July, 21st 2015 , the Senate Finance Committee released “Modifications of the Chairman’s Mark”, which included the extension of and some changes to Section 179D. The modifications made are part of the inclusion of a proposed two-year 179D extension into the base text of SFC’s tax extenders package. The proposed legislation text was released the week of July 13th 2015, proposing a two-year 179D extension to be made retroactive to back to expiration at the end of 2014.
In the proposed 179D extension through 2016 most notably, the Chairman’s modifications would permit tribal governments and non-profits to allocate the deduction to the design firm. This allows non-profits to behave the same as public property as far as 179D is concerned.
The modifications also increase the efficiency standards for qualifying buildings. The standards would be increased to ASHRAE 90.1-2007 in 2016 to help offset some of the costs from the extension package.
The Chairman’s Mark was approved by the Senate Finance Committee the afternoon July 21st 2015. The approval came through a markup that lasted about an hour and a half.
There’s still a long way to go on a 179D extension for 2015 and a lot of uncertainty as to when the Senate will review this extension package. As of now, we believe it unlikely to be reviewed before the August recess. The most likely time for debate of the extension package that affects 179D may be in October. As we enter the “tax filing extension” round of tax season still waiting for 179D extension for 2015, it is important to realize that government owned projects and private building owners can still benefit from 179D Tax Deduction on their 2014 returns. Government owned buildings meeting the energy criteria for 179D that were placed into service during open amendable tax years through 12/31/2014 are still viable opportunities for the incentive. Additionally private building owners can go as far back as 2006 and benefit 179D Tax Deduction in the current tax year.