For many, understanding how to manage specialty tax incentives can be difficult which is why there are tax specialists such as Walker Reid who aim to help educate the business community about the benefits of specialty tax incentives like the 179D Tax Deduction. With Walker Reid, we specialize in 179D Tax Deduction, which became part of the tax code under the 2005 Energy Policy Act, also known as EPACT.
When you look at a 179D tax deduction, a commercial building owner could potentially receive up to $1.80 per square foot of tax deduction for installing energy efficient building systems. However, it’s important to realize that this doesn’t apply to homeowners, but rather commercial buildings where they have achieved a reduction in energy power cost in the Interior Lighting Systems, Building Envelope as well as Heating and Cooling (HVAC Systems).
These types of buildings can qualify for up to $0.60 per square foot for HVAC, lighting, and building envelope, separately. If you’re looking into seeing if your building applies for a 179D tax deduction, you want to contact tax and engineering specialists who are certified by the IRS to perform energy analysis as well as site inspections.
What Qualifies for a 179D Tax Deduction?
If you’re concerned whether or not your building qualifies for a 179D tax deduction, the following are the types of structures that qualify under the EPACT:
- Commercial Buildings
- Commercial Renovations
- Apartments – that are four or more stories
- Government-Owned Buildings
Now, if you do own an apartment complex, the apartments need to be for lease if you want to try applying for the deduction. If you do qualify, you as the building owner will save, but you will only qualify if the structure was built and completed between December 31, 2005 and January 1, 2014.