The Steps to Obtaining a Section 179D Allocation from the GSA
The General Services Administration (GSA) plays a crucial role in allocating Section 179D deductions for government building projects. Under the Energy Policy Act of 2005, commercial building owners and tenants can claim tax deductions for specific energy efficiency projects made to their properties. As the federal agency responsible for managing government-owned facilities, which also qualify for these tax deductions, the GSA administers and oversees the allocation process to designers of these facilities, ensuring that the deductions are appropriately distributed to qualifying contractors.
This allocation is not automatic. Designers must follow a specific GSA procedure for requesting and receiving this allocation. Here’s a quick look at what you should do if you’ve completed design work on a government-owned project and want to request a Section 179D allocation.
Step One: Letter of Intent and Initial Verification
The first step is to submit a Letter of Intent (LOI) and certification Appendix A to a specific email address: email@example.com. The LOI is a simple form to fill out and requires the following information:
- The contractor’s name
- The year in which the improvements were placed into service
- Identifying info about the building (name and address)
- Which systems do the improvements apply to (interior lighting, HVAC/hot-water systems, or building envelope)
- Signatures of authorized representatives
Appendix A is a certification letter affirming that the signatory, as the contractor’s representative, has completed a consultation with all other project prime contractors and are declining the allocation in full or in part. It also states that the contractor has performed reasonable due diligence in reviewing whether any project subcontractors are interested in obtaining a deduction for their share of the work.
In addition to completing these two forms, contractors must also submit two additional items:
- A one-page project description that includes a description of the energy-efficiency improvements
- A separate, written verification from the project’s GSA project manager, which must verify that the work was completed according to the project description
All these items must be submitted as attachments to the email address above.
Step Two: Submission of a Third-Party Certification and Additional Verification
Once the submission is made and reviewed, the Office of Facilities Management (OFM) will verify and sign the LOI and Appendix A. At this point, the contractor must receive and submit the standard Third-Party Section 179D Certification signed by a licensed, professional engineer. This document must include the maximum per-square-foot deduction amount for which the contractor qualifies on the project.
The applicant must also fill out Appendix B as part of this submission. As with the first step that required Appendix A, this form requires basic information about the project, including:
- The name and contact information for the GSA project manager
- The name and contact information for an authorized representative of the contractor requesting the Section 179D allocation
- The cost of the project
- The date the project was placed in service
- The dollar amount of the requested allocation
The completed and signed Third-Party Certification and Appendix B can then be submitted as attachments to the same GSA email address to complete the process.
Failure to follow the submission process order or provide the required paperwork can delay and/or negate the submission. The GSA provides additional information on its process here.
As experts in §179D deductions and required certifications, Walker Reid has extensive experience performing and facilitating 179D studies between designers and government project clients, allowing for a seamless and un-intrusive process. Our engineers eliminate the burdens typically associated with the certifying of 179D projects. If you have any questions or concerns about how to pursue a Section 179D allocation request from the GSA, contact us today to schedule a call.
About the Author:
David Diaz is a partner at Walker Reid Strategies, a licensed professional engineering firm specializing in performing §179D studies and §45L certifications. Mr. Diaz is an expert in energy efficiency and specialty tax services who shares his insights at www.walkerreid.com and online through webinars. For more information, contact him at firstname.lastname@example.org.