179D Commercial Buildings Energy Efficiency Tax Deductions Extended: Potential Tax Savings for Architects and Engineers

Written on February 9, 2018

Early this morning (February 9, 2018), Congress passed the “Bipartisan Budget Act of 2018,” which included an extension of the Section 179D deduction to include projects completed in 2017.

As described by the Office of Energy Efficiency and Renewable Energy, the 179D commercial buildings energy efficiency tax deduction primarily enables building owners to claim a tax deduction for installing qualifying systems and buildings. Tenants may be eligible if they make construction expenditures. If the system or building is installed on federal, state or local government property, the 179D tax deduction may be taken by the person primarily responsible for the system’s design (usually the architect, engineer or contractor). The systems and buildings must have been placed in service by December 31, 2017. Deductions are taken in the year in which systems and buildings are placed in service.

A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope; or (3) heating, cooling, ventilation or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001 (for buildings and systems placed in service before January 1, 2016) or 90.1-2007 (for buildings and systems placed in service on or after January 1, 2016. You can read more details here.