The IRS Section 179 Deduction is a great tax deduction that applies strictly to commercial buildings that are equipped with energy saving systems. The tax deduction can reach up to the highest value per square foot of $1.80. This deduction can be applied to the actual developer or business owner, but not both. If a building is notably attempting to save money with their heating, cooling, lighting and building envelop, they can be inspected to qualify for this tax deduction. An analysis of partial credit can average thirty to sixty cents for a reduction in power density that equals twenty-five to forty percent. This means you would receive $1.20 on the lower end of the scale for savings per square foot. Some partial qualifications are also applicable at rates listed below.
Partial Tax Reductions per Square Foot
- HVAC – $0.60 – (15% Reduction)
- Building Envelope – $0.60 – (10% Reduction)
- Lighting – $0.60 – (25% Reduction)
Contact a Qualified and Licensed Engineering Firm to Meet Section 179D Tax Deduction Standards
Only a board certified and qualified engineering firm can assist you in qualifying for the Section 179D energy tax deduction. If you are just beginning to design a new commercial building, or you need to have a current commercial building inspected, all of the site inspections and energy analysis jobs need to be handled by trusted professionals. The energy analysis is performed so energy savings can be justified. The conclusions of these findings need to come from qualified Contractors and Engineers that come from the same jurisdiction where the building is located.
Buildings that Qualify for the 179D
There are several types of buildings that qualify for the Section 179D tax reductions. They include any size of commercial buildings, apartments that are four or more stories and are currently for lease, commercial buildings under renovation and government owned buildings. The actual savings apply to building owners. The owner of a public building can allocate the deduction to an engineer, energy consultant, contractor or architect. In order to fully utilize this tax credit you must have these inspections and certification done to prove energy efficiency.
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