What is the §179D Deduction?
The Commercial Buildings Energy-Efficiency Tax Deduction, more commonly referred to as the §179D Deduction, was enacted in 2005 with the passing of the Energy Policy Act. The Deduction was enacted to reward Architects, Engineers, and subcontractors performing energy-efficient projects in the United States on tax-exempt or private-sector properties or buildings.
Under §179D, companies may receive as much as $1.88 per square foot when making improvements surpassing current energy thresholds that result in creating a more energy-efficient building, Due to current changes made as part of the Inflation Reduction Act, the deduction maximum reward has jumped from a $1.88 per square foot (for projects placed into service prior to 2022) to $5.00 per square foot (for projects placed into service 2023 and beyond) for qualified projects.
