The 179D Deduction
Unlock Tax Savings for Energy-Efficient Buildings
Claim valuable deductions under §179D for qualifying energy-efficient upgrades in commercial and public buildings whether you're an owner or a building designer.
What is the 179D deduction?
The 179D deduction is a way to reduce a company’s taxable income by building, renovating, or designing commercial buildings with energy efficiency that exceeds established energy usage criteria.
As a part of the 2005 Energy Policy Act, the US tax code was updated to allow taxpayers that built energy efficient commercial buildings to accelerate depreciation. The rules have changed multiple times since it was introduced, and now allows designers of energy efficient commercial buildings to be allocated a deduction for work done for a non-tax paying entity, like state and local governments or tax-exempt organizations. The deduction sits under Section 179D of the tax code.
How much is the benefit?
2022 or earlier
Up to $1.88 per square ft.
2023 and forward
Up to $5.81 per square ft.
Pricing
We charge a low price per square foot for each building in our analysis. Our pricing reflects the individual needs of our clients, while ensuring them maximum return on their investment. Pricing models used by our competition serve to price gouge customers (fixed fee pricing) or incentivize aggressive and dangerous tax positions (% of deduction fees).
Pricing Features | Fixed Fee | % of Deduction | 1st Avenue Price per Sq. Ft |
|---|---|---|---|
| Provides Certain Cost | |||
| Incentivizes Accurate Work | |||
| Less Expensive | |||
| Avoids IRS Fee Scrutiny |
Ready to Maximize Your Tax Savings?
Our team of experienced accountants can help you identify opportunities and implement strategies to reduce your tax burden while ensuring compliance.
Frequently Asked Questions
Who can claim the 179D deduction?
Either the owner or the designer of a commercial building can claim the deduction. If the building owner pays federal income tax, it may deduct its own 179D deduction. If the building owner is a federal, state, or local government, or is a tax exempt entity, the building owner may allocate the deduction to designer of the building or its systems (because these entities do not pay federal income tax).
What if I don’t pay Prevailing Wage?
You can still qualify for a 179D deduction. The Inflation Reduction Act included incentives to increase the standard 179D deduction for building owners who: 1) paid prevailing wages to construct or renovate the building; and 2) employed a set minimum number of apprentices during the construction.
How do I know if my building is energy efficient?
We do the energy modeling for you to determine the level of energy efficiency as part of our standard consulting process. d
Does it have to be new construction?
No. Renovations and additions to buildings qualify for the 179D Deduction as well.