Energy Efficiency & Sustainability Consulting

Save Money on Your Taxes with 179D Deduction


Energy Efficiency Tax DeductionWith tax season quickly approaching, it’s important to identify every opportunity for savings before it’s time to file with Uncle Sam. If your building was built or renovated after 2006, or if you’re planning an energy efficiency upgrade for this year,  you could qualify for a tax deduction of up to $1.80 per square foot! Taking advantage of this deduction can significantly offset the upfront costs associated with implementing energy efficiency measures and improve cash flow.

As of December 18, 2015, Section 179D, also known as the Energy Efficient Commercial Building Deduction, has been extended through the end of 2016. This two-year extension applies to projects completed during 2015 and to those placed into service before December 31, 2016.  Both owners and tenants of commercial buildings can receive a tax deduction of up to $1.80 per sq. ft. for energy efficiency improvements that achieve at least 50% energy savings compared to ASHRAE standards. Buildings that don’t meet the 50% requirement can’t still qualify for partial deductions from $0.60 – $1.20 per sq. ft.  And, if your building was built after 2006, it’s very likely that you already qualify for this incentive, due to more rigorous building codes that took effect after 2006.

90% of the time, this deduction is overlooked by qualifying businesses!

It’s estimated that only 10 percent of qualifying projects take advantage of 179D. However, the deduction can be applied retroactively as far back as 2006, when it first became available to taxpayers. Using a designated form (known as Form 3115-Change in Accounting Method), taxpayers can easily take the deduction in the current tax year and avoid amending previous year returns.

Click here to see how 179D saved EES Consulting client, Gallery Furniture, thousands.

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