For Privately held buildings the building owners or lessees who purchase and install energy-saving products in their businesses can qualify for the tax deduction. Read more about private owners here.
For Public owned buildings the design firm can claim the tax deduction. The designer must be a person that creates the technical specifications for installation of energy efficient commercial building property. Read more about public projects here.
Any equipment that reduces the buildings energy usage that is related to the lighting, heating, cooling, ventilation or service hot water systems. Improved efficiencies on equipment that is solely used as a process loads does not qualify for the deduction (eg commercial refrigerators).
The process is relatively simple and straightforward. A feasibility investigation is initially conducted to determine projects eligibility and approximate value of the deduction. If the building is deemed a suitable candidate then the project is modeled using energy analysis software. The energy model is constructed from design drawings and/or field data collected. A mandatory site visit is required to verify the building equipment. The last step is providing a certification letter which is kept with your tax records. Tax returns are amended or the deduction is included in the current year. For more information on the certification process click here.
It is required by the IRS that an independent third party must perform the certification. The third party can not be related to the taxpayer claiming the deduction and must be an engineer that is properly licensed as a professional engineer in the state where the project is located
There are none. Our trained professional staff of licensed engineers and certified public accountants have years of experience conducting 179d certifications. The work is completely thoroughly and accurately so there is no risk of having a tax liability. In the event that you are audited, our certified public accounts will assist your tax professionals with any questions that come up during the auditing process.
There is no upfront cost associated with obtaining the 179d deduction. The certification fee is a percentage of the final tax savings as a result of the deduction. This service does not cost your company a penny but instead we will save your company millions. Contact us today to take advantage of this energy efficient tax savings.
Greenergy is a Professional licensed Engineering company with offices in Chicago, Denver and Austin, TX. We work across the United States performing energy analysis to help building owners save money on their energy bills. For more information about Greenergy click here
For more information on the certifcation process click here
Renovation work on two elementary schools which included installing high efficient lighting, new air handling units with heat recovery wheels resulted in $350k being allocated to the design firm
$400k was allocated to a design firm for an upgrade project to a federal courthouse including replacement of cooling towers, chillers, and installation of condensing boilers and a building automated system
YOUR COMPANY CAN SAVE MILLIONS WITH THIS POLICY
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A large company with multiple manufacturing facilities obtained $1.2M in tax deductions when their building underwent building upgrades to the HVAC and lighting systems
A building Cooperative obtained $300k in tax deductions as part of a complete building upgrade that took place on an older residence high rise
Over $3M in deductions were allocated to a military contractor who completed boiler, lighting and other HVAC building improvements to various US military bases around the country.
A contractor/design firm qualified for over $2.8M in tax deductions as a result of chiller, cooling tower and lighting upgrades to 14 schools
The Energy Policy Act (EPAct) was enacted in 2005 and included a section on providing tax incentives to buildings that reduce their energy consumption in an attempt to subsidize and stimulate energy efficiency measures.
Since its commencement, the 179d has been twice extended as part of the Energy Independence Act of 2007 and the Emergency Economic Stabilization Act of 2008. Privately owned projects are able to take the incentive for any project completed after 2005. Public projects can take the incentives for projects completed within the last 3 years.
The tax incentive is to help alleviate extra capital investment cost associated with energy efficient building technologies, support economic growth here in the United States in the construction and manufacturing industry, and promote energy conservation to reduce energy consumption, protect natural resources and move toward a more secure energy future.
The energy savings are broken into three categories, Building Envelope, HVAC, and lighting, each representing $0.60 of the total $1.80 per square foot tax deductions. The lighting can be a partial deduction with the interim lighting rule or a full deduction depending on the energy savings. The building envelope and HVAC systems must reach a set percent savings to qualify for that category. If the building achieves 50% energy savings then the building qualifies for the full deduction ($1.80 per SF) independent of whether the individual categories reached their required savings. Below you can see the required savings as dictated by the 179d tax bill.
The energy savings are based on comparing the actual building with the energy efficient equipment installed to a Baseline building which is the same geometry of the actual building but the building system parameters are defined by ASHRAE standard 90.1-2004 appendix G in accordance with 179d guidelines.
Visit our 179d Process Page for more information on the certification process.
179d Energy Efficient Tax Deduction