If you are an engineer or architect, you may unknowingly be missing out on some specialty tax incentives. Most utility companies also offer custom energy incentives to architects and builders. Municipalities require architects to show compliance with ever-changing energy building codes. At Engineered Tax Services (ETS), we partner with engineers and architects nationally to provide independent, third-party energy modeling, design and certification as required by the IRS, utility companies, and municipalities to help them take advantage of significant energy benefits.
179D Energy Certifications
Architects and designers have a three-year look back window for a federal tax benefit of up to $1.80 per square foot for the design of energy-efficient public buildings placed into service after January 1, 2006.
Benefits are available to architects and designers through the Energy Policy Act of 2005 for properties placed into service prior to December 31, 2013. If you have installed energy-efficient lighting, HVAC systems, or building envelope components (roof, windows, insulation) since 2006, ETS can assess your eligibility for significant savings. For new buildings, ETS can ensure through third-party energy modeling and design, that the maximum tax benefit is realized.
How Energy Benefits Your Clients:
Architects and designers are experiencing positive effects as a result of the Energy Policy Act’s extension.
- Increased satisfaction from commercial-building-owner clients who are eligible for a tax benefit of up to $1.80 per square foot for the installation of energy-saving systems into new or existing construction.
Important: the energy tax certification also helps clients reduce property and casualty insurance premiums.
- Increased cash flow through a direct allocation of the federal tax benefit (a partial deduction of $0.60 per square foot) to private property clients for the installation of energy-saving lighting systems in new or existing buildings or to designers for public buildings owned by a federal, state or local government.
- More comfortable and durable building decrease maintenance and operation costs.
Custom Utility Incentive Programs
Most utility companies offer incentives to builders and architects who design with energy efficiency in mind. These incentives come in two forms. Modest incentives can be acquired through prescriptive energy incentive programs. Examples of prescriptive programs include fixed rebate amounts for energy-efficient lighting, extra insulation, etc. More generous energy incentives are available for builders and architects who prove, through third-party energy modeling, that buildings are more efficient than building codes require. As a third-party energy modeler and designer, ETS can help maximize energy incentives and rebates on your project.
Research & Development (R&D) Tax Credit
To qualify for the credit, your firm must develop a new or improved business component based on technology grounded in the physical sciences (such as engineering principles, biology, chemistry, and/or computer science). There must also be uncertainty associated with the project, and a process of experimentation and testing to resolve the uncertainty. If your architectural or engineering firm is spending more time focusing on sustainable and green designs to incorporate into building features, then you may be eligible to benefit from the Research and Development Tax Credit. Expenses associated with the development of individually unique functional and energy-efficient designs meet the requirements of the IRS R&D tax credit. For Engineering firms, the focus is on activities in design and development in structural, mechanical, and electrical systems for unique buildings & structures.
Construction Tax Planning
Construction tax planning uses a proactive approach to identifying additional tax benefits related to new and planned construction projects. Accelerated deductions are identified by analyzing costs and documenting their design and construction based on federal guidelines that define tangible property from the stages of a construction project.
Items to be considered for optimal benefits include Interior walls, ceilings, flooring, misc. finishes, warehouse applications, HVAC, plumbing, electrical, building attachments and typical site improvements.
Our ETS construction tax planning engagement team will also analyze I.R.C. Sec. 174 embedded costs, indirect costs, and professional fees (soft costs), during the planning and design phases of a construction project, allowing for an immediate tax deduction in the year the cost is incurred.
Getting ETS involved in the pre-design phase allows our subject matter experts to properly identify the materials and methods, direct and indirect, that maximize personal property and land improvements that qualify for accelerated depreciation deductions. For more information, please call (800) 236-6519.