Now Permanent! Read full details here.
Under the Consolidated Appropriation Act of 2021, the 179D Commercial Buildings Tax Deduction, also known as the 179D EPACT Tax Deduction, was made permanent. Note: the tax deduction now compares to the building standard from two years prior to the start of construction, rather than ASHRAE 2009 standards.
The 179D Energy Policy Act certification calculates the tax deduction achieved from the installation of energy-efficient assets, including HVAC, building envelope and lighting. The building may qualify for up to $1.80 per square foot ($0.60 per square foot for each system); however, partial deductions are allowed for lighting. The deduction is available for newly constructed or energy renovated commercial buildings as well as apartment buildings four stories or more. Commercial property owners who pay taxes can claim the benefit with the exception of government-owned buildings where the tax deduction may be allocated to the designer.
Note: The 179D Energy Policy Act was retroactively extended in 2019 to include 2018 and 2019.
ETS has provided thousands of Energy Policy Act tax certifications since 2005. By managing over 100 certifications every month, we have perfected the process by working closely with the IRS. Our precise documentation meets and exceeds the standards required by the Department of Energy and the IRS, and it has consistently withstood the toughest scrutiny.
Must reduce total annual energy and power costs with respect to the interior lighting systems, heating, cooling, ventilation, and hot water systems by 50%. However, partial deductions are allowed. Energy simulation is required to justify the deduction; inspection and testing must be completed by a qualified engineer or contractor registered in the jurisdiction. A breakdown of the percentage of energy reduction per system is in the chart below.
| System | Lighting | HVAC | Building Envelope | Whole Building |
|---|---|---|---|---|
| 2006 Revision | 16 2/3% | 16 2/3% | 16 2/3% | 50% |
| 2008 Revision | 20% | 20% | 10% | 50% |
| 2012 Revision | 25% | 15% | 10% | 50% |
| System | Lighting | HVAC | Building Envelope | Whole Building |
|---|---|---|---|---|
| 2006 Revision | 16 2/3% | 16 2/3% | 16 2/3% | 50% |
| 2008 Revision | 20% | 20% | 10% | 50% |
| 2012 Revision | 25% | 15% | 10% | 50% |
Lighting is the only component that can partially qualify for the deduction. Depending on the reduction of Lighting Power Density (LPDs), the owner/designer can qualify from $0.30 – $0.60 per square foot. Lighting is dependent on square footage, building type, bi-level switching, and energy consumption. There are also multiple ways for qualifying a property based on the code revisions. Please contact us to provide a complimentary energy review of your project.
A project must have new equipment installed which can include, Air or Water Cooled Chillers, Rooftop Units, PTAC Units, Geothermal Systems, or High-Efficiency Unit Heaters. Certain options will enhance your property’s likelihood of qualifying. These would include, VAV systems, VFD’s, economizers, Energy Recovery Ventilation, and High SEER or EER Ratings.
The building envelope can be the most difficult system to qualify in a renovation/retrofit. Typically if at least two of these items have been upgraded it may qualify. These systems include: Windows, Roofing Improvements, Window film or tint, Doors, and Wall-Roof or Floor Insulation.
Properties placed in service (New Construction or Renovation) after December 31, 2005 through December 31, 2020.
ETS will provide you with a summary of compliance with a Department of Energy certified software and engineer or contractor verification documentation. According to your preference, ETS will provide all documentation in either paper or electronic format.
Since the Energy Policy Act of 2005 (EPACT) was enacted, ETS has been at the forefront of the energy accreditation and related tax benefits field. We speak regularly before national and regional energy groups and work closely with the IRS on evolving energy-related issues. We have been retained by some of the country’s leading CPA firms to provide services to their clients. In addition, we have worked directly with several Fortune 500 companies as well as some highly recognizable brands, including Google, IKEA, MSNBC. Our technical expertise in energy accreditation is unmatched.
We effectively marry the sciences of engineering and accounting through our utilization of exceptional tax and accounting professionals as well as licensed engineers.
ETS engineering professionals have over 100 years of combined experience in energy modeling. The ETS engagement team includes multidisciplinary professionals such as professional engineers, LEED accredited professionals, CPAs and architectural professionals. Our collaborative and proactive approach has made us the leading provider of energy tax services. Through strategic partnerships, we work in tandem with CPA firms, architectural firms, contractors and attorneys.
We perform engineering-based specialty tax services for firms of all sizes around the country, resulting in considerable tax savings for their clients. Through a partnership with ETS, you’ll benefit from having professional, licensed engineers who possess the specific expertise to perform accurate, thorough and compliant engineering-based specialty tax services—with little or no capital investment to your firm.
Our multi-disciplinary expertise and vast, specialized experience enable us to deliver unmatched quality and continuum of service
We understand the IRS technical issues involved in energy tax credits, including the benefit of donating the credits from public buildings to designers
Nationally sought, we have been asked to participate in local, regional and national conferences by making presentations to share our knowledge and expertise
We have LEED Accredited Professionals on staff
All of our reports are forensic, fully insured and provide audit defense
ETS is approved by NASBA and the USGBC to provide continuing professional education (CPE and CE) on energy topics
We are nationally published and recognized as experts
ETS is a member of ASHRAE and USGBC
We have been engaged by the Los Angeles Community College District to certify over 250 buildings to benefit the local stimulus
We have worked with Fortune 500 companies, Top 100-ranked accounting firms, national real estate firms, international architects, and many of the top lighting firms in the country
Ask us about our Hidden Treasures program, an innovative assessment system designed to boost your profitability based on your real estate investments. Please ask us how we are helping CPA firms, attorneys, architects, contractors, real estate investors, property owners and tenants benefit from their real estate investments in such areas as:
$756,076.76 in Additional Tax Savings Private Buildings and Owner Benefits By applying cost segregation, property investors accelerate depreciation, reduce tax liability and increase their bottom line.
Location Lighting Square Footage Accelerated Tax Benefit Peoria, AZ $0.60 40,920 $24,552.00 Helenda, MT $0.60 91,725 $55,035.00 Temecula, CA $0.60 135,380 $81,228.00 Brooklyn, NY $0.60
$154,945.20 in Total Realized Tax Savings Location Lighting Square Footage Tax Benefit Davie, FL $0.60 258,242 $154,945.20 Total $154,945.20 The facility utilizes a variety
You may not be aware of it, but if you’re a property owner, some changes to current tax laws could put substantial money in your
Make U.S. tax law work for you. Self-storage operators can benefit significantly from using cost segregation because of the unique types of construction and exterior
Recently Sen. Ron Wyden (D-Oregon), chairman of the Senate Finance Committee, reintroduced the Clean Energy for America Act (CEAA). Of interest to those in the energy efficiency
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