After a very long wait, Congress has reinstated the EPACT 179D Commercial Buildings Energy Efficiency Tax Deduction. Legislation has been signed by the President which provides retroactive application of 179D for both the 2018 and 2019 tax years and extension through 2020.
Which properties might qualify for 179D?
- Any commercial building (any size) or residential rental structure (of four or more stories) that has undergone lighting, HVAC or building envelope upgrades.
- Newly constructed buildings that have been designed and built to meet certain energy efficiency thresholds.
Eligible properties will receive up to $1.80 per sq. ft. in tax deductions. Look-back studies may be performed on properties for which tax returns have already been filed by simply completing IRS form 3115 (i.e. no need to amend returns). By way of reference, this important tax strategy expired on December 31, 2017. We have been waiting for this provision to be extended – finally, it has happened. If you own properties that were constructed or if you have undertaken a major energy upgrade after December 31, 2005 through December 31, 2020, please contact our Energy Services Group to receive a complimentary evaluation to see if your property qualifies.