The Consolidated Appropriations Act of 2021 permanently extended the 179D tax deduction.
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]…Deductions are taken in the year in which a system or building is 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.”
If you have questions about how this will affect you or your business, please contact your Warren Averett advisor or ask a member of our team to reach out to you.