Tax Incentives

What are the tax incentives for energy-efficient buildings?

As we enter the 4th quarter of 2022 and start planning for the next calendar year, there are a few tax incentives available that your business/building may qualify for.

• Designing a new building or improving an existing building to be Energy Efficient may help you meet sustainability goals that could increase your cash flow and reduce Federal Income Tax liability.
• Section 179D of the Internal Revenue Code allows a deduction of up to $1.80 per square foot for energy-efficient commercial building property (EECBP).
• Privately-Owned properties, as well as tenants who pay for and are depreciating the energy-efficient improvements placed in service as of January 1, 2006, could benefit from the 179D deduction.
  • This program applies to reduce energy costs in three areas:
    1) Heating, cooling, ventilation, and hot water systems (HVAC)
    2) Interior lighting systems
    3) Building envelope (Increase thermal value and energy-efficient membrane)
• The following taxpayers are eligible to claim an energy-efficiency deduction:
  1) Designers of government-owned buildings
  2) Owners and tenants of commercial buildings that built or installed energy-saving improvements
  3) Owners of four-story or greater residential buildings that built or installed energy-saving improvements
• The 179D tax deduction is a permanent part of the tax code and doesn’t expire.

These comments for this Newsletter are provided by the experts at All Seasons Roofing to help you and should not necessarily be interpreted as the law. Please consult with your Tax Professional for all the details on Section 179D of the Internal Revenue Tax Code.