How 179D EPAct Benefits Both Public Entities and Designers

Why EPAct Benefits Public Entities

Several Architectural firms have discussed EPAct with their School and City clients. When a Public Entity agrees to sign the EPAct gifting letter, the Architect is then able to take advantage of the EPAct tax deductions, which allows the Architectural firm to work to maximize energy savings for that Entity.

The maximization of the savings has the effect of helping generate tax benefits for the Architect (these are the EPAct 179D Tax Deductions). The benefit of the energy savings to the Public Entity is usually quite substantial.

For example, with a middle school campus, the Architect worked to find an additional 12% savings in the cost, to light the interior of the buildings. This 12% savings was sufficient to gain the Architect an additional $0.60 per square foot in tax deductions for the Architect, but what does this modest 12% savings in the cost of running their lighting mean to the school district? Quite a lot, not just for this year, but for ongoing years as well.

The following table shows the savings of the middle school campus for the school distric:

In summary: The School District incurred no additional cost to the design of the buildings or costs in construction to obtain these significant savings.

Over the next 10 years this school stands to gain $165,080 or more in energy savings. This example highlights just ONE of 10 campuses that this particular School District has either constructed or renovated. For all 10 campuses over the next 10 years, the District could realistically save over $1,650,000!


It is easy to see why Architectural firms are investing their own time and resources, going above and beyond, to look for ways to maximize the 179D EPAct benefits while maximizing the energy efficiency of the building. The modest one-time gain of $0.60 per square foot, in tax deductions gained by the Architect, is pale in comparison to the $1.6 MILLION that the District gains over the next few years, or the annual savings of $165,000. On average, the School District will receive an approximate 20% permanent reduction in each building's operational costs, each year.

What is 179D EPAct

Each building component (Building Envelope, HVAC, and Lighting) can qualify for a federal tax deduction of up to $0.60 per square foot. These deductions can come about due to new construction or renovation. In order to qualify for these deductions, an analysis of your energy savings is required by a qualified firm (such as a licensed engineering firm like Engineered Tax Services). The savings are significant can additional tax benefits are often identified through the engineering process. Contact ETS here for more information or for a free benefit analysis.

Recent Posts

Can Cost Segregation Be Used as a Planning Tool in Real Estate Investments?

In the world of real estate investing, savvy investors are always on the lookout for strategies to maximize profitability and streamline financial management. One such strategy that has gained significant traction is cost segregation. But can cost segregation truly serve as a planning tool, beyond its immediate tax benefits? The answer is a resounding yes.

Read More »
avoid IRS audit cost segregation study

5 Tips to Avoid an Audit When Conducting a Cost Segregation Study

Cost Segregation studies can be a powerful tool for real estate investors and property owners looking to maximize their tax savings through accelerated depreciation. However, navigating the complexities of these studies can be challenging, and if not handled correctly, it may attract unwanted scrutiny from the IRS. To help you reap the benefits of Cost

Read More »

Cost Segregation: The Key to Golf Course Tax Breaks

Just as a well-placed tee shot sets you up for success on the fairway, cost segregation can pave the way for financial wins in real estate investment. Let’s explore how cost segregation can be your “hole-in-one” for tax savings. A Hole-in-One for Tax Efficiency Imagine a golf course with lush, manicured fairways, strategically placed bunkers,

Read More »

Contact Us