179D Energy Policy Act Deduction

Under the Energy Policy Act of 2005 (EPAct) owners and designers of new and existing energy efficient commercial buildings are eligible for up to $1.80-per-square-foot tax deduction. For example, the deduction for a qualifying 100,000-square-foot building could be up to $180,000. The $1.80 can also be split across the three building systems listed below of up to $0.60 per square foot per system. This deduction is known as the Section 179D Tax Deduction for Energy Efficient Commercial Buildings.

Recently, President Trump signed the Omnibus Appropriations Bill H.R. 1865 into law, extending a number of provisions that expired at the end of 2017, including the 179D tax deduction. This allows property placed in service between January 1st, 2006 and December 31st, 2020 to take advantage of this deduction.

In order to take advantage of the Section 179D deduction, the IRS requires an energy modeling study that compares the proposed or existing building’s energy usage to that of a baseline building’s. Net Profit Advisors, LLC combines an energy modeling solution specified by the IRS and our tax expertise to generate an EPAct study required for the 179D deduction. This is one of the many deductions and credits we evaluate for our Portfolio clients, so if that’s not you, request an invitation today!