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Eligible: Businesses, Local Government, Nonprofits, Public Agencies, Tribes

Apply by Dec 31, 2032

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Energy Efficient Commercial Buildings Deduction (179D)

From Internal Revenue Service (IRS)

Provides a tax deduction for the cost of energy efficiency improvements to commercial buildings, installed as part of the building envelope; interior lighting systems; or the heating, cooling, ventilation, and hot water systems. Maximum Deduction Amount: $0.50-$1 per square foot, depending on increase in efficiency, with deduction over three or four-year periods capped at $1 per square foot. Inflation adjusted. A new alternative deduction for energy efficient building retrofit property is also available. Deductions available for new construction as well as buildings constructure before 2022.

  • Overview

    • Type

      Tax Incentive

    • Title

      Energy Efficient Commercial Buildings Deduction (179D)

    • Source

      Internal Revenue Service (IRS)

    • Federal or State

      Federal

    • Award Range

    • Cost Share

      Yes

  • Eligibility

    • Audience

      Businesses, Local Government, Nonprofits, Public Agencies, Tribes

    • Sector

      Buildings & Infrastructure, Energy Efficiency

    • Activity

      Equipment Purchase/Lease

    • Eligibility

      Owners of qualified commercial buildings; Designers of EECBP/EEBRP installed in buildings owned by specified tax-exempt entities, including certain government entities, Indian tribal governments, Alaska Native Corporations, and other tax-exempt organizations

    • Location

      National

  • Application Process

    • Application Link

      irs.gov

    • Requirements

      Prevailing wage & apprenticeship bonus: Beginning in 2023, if local prevailing wages are paid and apprenticeship requirements are met, an increased maximum deduction applies. The maximum amount increases to 5 times the savings per square foot amount.

    • Disbursement Method

      Tax Deduction

  • Important Dates

    • Application Open Date

      Jan 1, 2023

    • Application Close Date

      Dec 31, 2032

  • Resources & Contacts

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