179D Energy Efficiency
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What is a 179D Tax Deduction?
Starting in 2023, the Inflation Reduction Act (IRA) has substantially increased the possible tax savings for the §179D tax deduction. The new rules increased the deduction up to an astonishing $5.00 per square foot. Prior to the IRA, the deduction was created by the 2005 Energy Policy Act, which allows a deduction up to $1.80 per square foot.
Align specializes in obtaining §179D tax deductions, and our process is straight-forward and requires minimal involvement from your team. We do the work - you benefit:
Partnership
Frequently Asked Questions - §179D Tax Deduction
How do I know if my property qualifies?
A §179D feasibility test and calculation must be completed by professionals with the expertise and required accreditations. The calculations must be conducted using Department of Energy-approved software by a qualified engineer or contractor who is authorized to inspect and certify properties in the building’s jurisdiction.
Who are the ideal candidates?
Building owners and Designers of government or tax-exempt owned buildings (allocation letter required) are the ideal candidates.
What types of buildings qualify?
• Commercial buildings of any type
• Residential buildings of 3 Stories or more
• Government or tax-exempt owned buildings (with allocation letter)
• Parking garages
Does the date that construction was completed matter?
There has been a significant change in the eligibility of the deduction for taxpayers, which depends on the placed-in-service date of the property. The dates of differentiation are:
Properties placed into service prior to January 1st, 2023 and those after January 1st, 2023.
Want to learn more about what these dates and ASHRAE Standard 90.1-2007 mean for the amount of deduction?
Read our Insight article from one of Align’s experts on the topic.
Want to learn more?
Read more about the 179D tax deduction from an expert on the topic. Contact Us today to see if your business is eligible.
