The Section 179D Commercial Building Energy-Efficient Tax Deduction (Section 179D) is a tax deduction available to construction, engineering and architectural companies. If your company is responsible for the design components of energy-efficient, government-owned buildings, you may be eligible for the deduction. The reason behind the initiative, which as of 2021 is a permanent part of the United States Tax Code: Since these buildings are public, non-taxable entities, the construction, engineering and architectural firms on the project qualify as “designers” of the building.
Your firm can apply for the deduction upon completion of the building project, through the 179D study produced the year the building is put into service. If the building meets the study requirements, a claim of up to $1.80 may be made, adjusted for inflation.
It’s important to act promptly if you feel you qualify for a Section 179D deduction. There is a defined amount available for any one project, so you’ll need to get in line early with all the required documentation.
The Section 179D energy deduction represents a significant opportunity for additional cash flow for those firms that qualify. The process, however, can get complex, and there are a number of steps, forms and details that need to be properly documented and submitted as part of your tax return.
We are experts at all aspects of the Tax Code, including the Section 179D deduction. We know that, while it may represent an excellent opportunity for you, you may not have the time or resources to pursue this and all the other tax savings and deductions you may be entitled to. We would be happy to sit down with you, as a company involved in government building construction, to determine your eligibility under Section 179D, and help ensure that you successfully apply for and receive these types of deductions on your tax return. The cash flow opportunities exist, in this area and others. Contact us to find out how we can help you get what you are eligible for.