EPAct 179D + 45L set to expire 12/31/16 - ELB Consulting

EPAct 2005 created the 179D/45L Energy Efficient Tax Incentives with the goal of providing building developers/owners tax incentives to help offset the increased costs associated with constructing energy efficient (“GREEN”) commercial buildings.

  • The 179D allows for a tax deduction of up to $1.80/SF
  • The 45L provides for a $2,000 per qualified unit tax credit 

EPAct Energy Tax Incentives look at the building three major subsystems: Envelope, Lighting, and HVAC/Hot Water, with the goal of reducing the property’s carbon footprint. Building owners can qualify not only on new construction, but for any building that has done energy efficient lighting retro fits or upgrades. Tenants may also qualify if they paid for, and own the lighting improvements.

The overarching purpose of the deduction is to encourage energy efficiency by creating a tax incentive intended to benefit a commercial building owner.

Expiration on 12/31/2016?

While this is set to expire at year-end, it has expired and been renewed numerous times. It is probable it will be renewed again for 2017 – though it could be mid-year before that occurs. (There is a lot going on in Washington D.C these days.)

Meanwhile, we can look back to 2006 to assess “in service” completed construction or retrofit projects for the 179D commercial tax deduction. We can go back three (3) years to the “in service” date for the 45L residential tax credit.

Feel free to contact me for an assessment on whether your project will qualify for these incentives.

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