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Energy Tax Services
179D EPAct
Services
Maximize energy efficiency tax deductions for your commercial building through the Energy Policy Act (EPAct).
Average Savings
$2.00/sq ft
For qualifying buildings
Max Deduction
$5.00/sq ft
With labor standards
Program Length
10+ yrs
Available through 2032
Understanding the Deduction
What is the 179D Tax Deduction?
The Energy Policy Act of 2005 created this powerful tax incentive to encourage energy-efficient commercial building construction and improvements.
25%
Min Savings
$5.00
Max/Sq Ft
2032
Extended To
Strategic Energy Tax Planning
The 179D deduction incentivizes energy-efficient commercial building construction and improvements. With recent updates from the Inflation Reduction Act, qualifying buildings can now receive significantly higher deductions by meeting energy savings and labor standards.
Energy Savings
25-50% reduction over baseline
Bonus Rate
Up to $5.00/sq ft with labor standards
Certification
Expert verification of energy savings
Documentation
Comprehensive IRS compliance
Eligible Assets
Three Key Categories for 179D Deductions
Energy-efficient improvements in these critical building systems qualify for substantial tax deductions
HVAC Systems
High-efficiency heating, ventilation, and air conditioning systems that significantly reduce energy consumption
- Energy-efficient chillers & boilers
- Variable air volume systems
- Smart HVAC controls
Building Envelope
dvanced insulation and building materials that minimize heat transfer and energy loss
- High-performance windows
- Advanced insulation systems
- Cool roofing materials
Lighting Systems
Energy-efficient lighting solutions that reduce power consumption while improving illumination
- LED lighting systems
- Daylight harvesting controls
- Occupancy sensors
Eligibility
Qualifying Buildings
A wide range of commercial and residential buildings can qualify for the 179D deduction
Commercial Buildings
- Office Buildings
- Retail Spaces
- Industrial Facilities
- Warehouses
Residential Buildings
- Apartment Buildings (4+ stories)
- Student Housing
- Senior Living Facilities
- Hotels & Resorts
Public Buildings
- Government Buildings
- Public Universities
- Public Schools
- Municipal Buildings
Deduction Values
2023 Deduction Rates
Sliding scale based on energy efficiency improvements and labor standards
Base Rate
25% Savings $0.50/sq ft
35% Savings $0.70/sq ft
50% Savings $1.00/sq ft
Labor Standards Rate
25% Savings $2.50/sq ft
35% Savings $3.50/sq ft
50% Savings $5.00/sq ft
Common Questions
Frequently Asked Questions
Get answers to common questions about the 179D tax deduction
What is the section 179D tax deduction?
The 179D deduction allows building owners, REITs, architects, designers, engineers, and construction companies to claim up to $1.00 per square foot for energy-efficient buildings and up to $5.00 per square foot (plus an inflation adjustment) for energy-efficient buildings that meet labor standards.
Can engineering, architecture and construction entities claim a Section 179D deduction?
Yes. The Section 179D deduction can be allocated to engineering, architecture, and construction entities responsible for the design components of government-owned, energy-efficient buildings. Since the owners of these public buildings are nontaxable entities, the deduction goes to the primary designers.
Will claiming the section 179D deduction trigger an IRS audit?
No. If you claim the deduction as a designer of government-owned buildings, it won't automatically trigger an audit from the IRS, but you must follow the right steps to determine qualification for the deduction.
How does 179D work?
IRC Sec. 179D lets building owners and eligible designers/builders claim tax deductions for installing qualifying energy-efficient systems and buildings. The deduction operates on a sliding scale, with its value increasing as taxpayers achieve higher levels of building efficiency.
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onnect with your nearest ETS expert today to maximize your 179D tax deductions.
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