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179D Tax Extended by Senate - Permanent

This comes after the House signed the bill which extends the §179D Tax Deduction and §45L Tax Credit retroactively for projects (purchased, new construction and renovations).

Baseline requirements for the qualification of §179D Tax Deduction will remain ASHRAE 90.1-2007

  • If the target of 50% savings is met, the building will qualify for $1.80/SF (capped at the costs of the capitalized improvements)

For buildings which do not meet the 50% savings, the tax provision also allows for partially qualifying system:

  • $0.60/SF for HVAC systems meeting 15% savings
  • $0.60/SF for Lighting systems meeting 25% savings
  • $0.60/SF for Building Envelope systems meeting 10% savings

Tax payers no longer have to amend the return for 179D with the Revenue Procedure 2011-14, which allows taxpayers to claim this deduction back to 1/1/2006 without filing amended returns, instead file a Form 3115 (Change in Accounting Method) and will take the entire “catch up” deduction on the return that is being filed.

Previous 179D studies, savings

Square Feet
50,000 sf
100,000 sf
300,000 sf
Lights HVAC Envelope
$30k     $30k     $30k
$60k     $60k     $60k
$180k   $180k   $180k
Full Tax Deduction
$90,000
$180,000
$540,000
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