Insights: Article

Section 179D Energy Efficiency Deduction Benefits Extended

Available for buildings placed in service prior to January 1, 2018.

February 16, 2018

A hand seemingly holding a lightbulb which is drawn on a blackboard

The Bipartisan Budget Act of 2018 extended the 179D deduction among other deductions and credits. 179D is an energy efficiency deduction and now available through Dec. 31, 2017. With changing rates in 2018, this is another opportunity to maximize deductions in higher rate years.

Who can take advantage of the Section 179D Certification?
If you placed a facility that is at least 50,000 square feet in service prior to Jan. 1, 2018, you could benefit from the Section 179D deduction. The deduction is available for building owners as well as businesses and individuals who have significant involvement in the design of governmental facilities including general contractors, electrical contractors, HVAC contractors, suppliers, architects and engineers.

What is Section 179D?
The Section 179D energy efficiency deduction is a tax deduction available to certain businesses owning a building where energy efficient components have been installed. Depending on the energy efficient lighting, HVAC/hot water systems, and/or building envelope components added to an existing structure or designed into a new building, the benefit could be up to $1.80 per square foot.

A Recent Example
We recently worked with a manufacturing facility to obtain the Section 179D deduction. The facility underwent an 183,000 square foot expansion and installed energy efficient HVAC, lighting, and building components. By gathering the necessary information and completing the certification, the client received over $325,000 in deductions on their current year tax return.

Next Steps
Contact your Eide Bailly professional or a member of our cost segregation team to learn more.