The Future of 179D and 45L Energy Tax Incentives


Regarding requests for updates on the status of 179D and 45L extensions, unfortunately the answer is still nothing yet! But here is what we do know:

The History

The 179D Energy Policy Act was enacted in late 2005 and has expired and been revived numerous times over the years. This incentive provides MANY taxpayers with deductions of up to $1.80 per square foot for new construction and renovations of commercial buildings. Even greater so are the architects and designers that benefit from the direct allocation of deductions to their companies from publicly funded projects (i.e., schools, military, higher education, state, county and local offices and more).

The 45L Residential Tax Credit is another energy tax incentive directed towards developers of multi-family housing projects whom have benefited from a significant tax credit of $2,000 per unit on buildings optimized for energy efficiency. This provides not only industry stimulus for new construction and renovations, but also helps change the design of thousands of projects around the country to ensure more efficient buildings and lower energy costs for the lucky residents of these properties!

So What Now?

Extended by the PATH Act, both tax incentives remain available for qualifying property placed in service before January 1, 2017. Presently, there has been little word as to the future of energy bills like 179D and 45L that expired at the end of the year. According to the Real Estate Roundtable's 2017 Agenda, “88% of U.S. buildings were constructed before the implementation of modern energy efficiency standards. This means there is significant room to improve the efficiency of our existing infrastructure.” While the future of 179D, 45L, and many other energy incentives remains uncertain, it will continue to be a topic of discussion. We will watch it closely as the Trump Administration unfolds its energy plans for the coming year.

It’s Not Too Late!

In the meantime, keep in mind that any projects with completion dates between January 1, 2006 and December 31, 2016 still qualify for these tax incentives and provide a solid benefit for taxpayers looking for additional write-offs and increased cash flow. If you have not taken advantage of 179D or 45L in the past, it’s not too late. Give us a call today, 800-236-6519, to review your projects and properties or contact us here for a free pre-qualification review!


Engineered Tax Services

Engineered Tax Services

Recent Posts


The Ins and Outs of the ERTC

The Employee Retention Tax Credit (ERTC) is a tax credit offered by the federal government to assist businesses in retaining their employees during economic hardships. This credit was introduced in 2020 as a response to the COVID-19 pandemic and has been extended until the last quarter of 2021.

Read More »

Cost Segregation: A Tax Strategy for Office Building Owners

As an office building owner, navigating the complex world of taxes can be a daunting task. With commercial properties subject to a variety of tax rules and regulations, it’s easy to get lost in the details and lose sight of your bottom line. That’s where cost segregation comes in.

Read More »
International Women's Day

Women Leading the Way: Lessons in Resilience and Success

Introduction As we enter Women’s History Month and celebrate International Women’s Day on March 8th, Engineered Advisory is proud to recognize the many phenomenal women who are part of our community. As a predominantly women-led organization, we value diversity in leadership. From executives to team members, we firmly believe that a diverse leadership team fosters

Read More »

Contact Us