News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
179D Tax Break for Energy Efficient Buildings — Update
Dean Zerbe / Forbes / August 19, 2013
I want to update readers — especially architects, engineers and contractors working on federal, state or local government contracts– on a little-known big tax break that is available now and that can put sometimes hundreds of thousands of dollars of cash into the pocket of your business.
What is this wonder tax break? 179D. This is the section of the tax code that provides a benefit for businesses, architects, engineers and contractors when they build or renovate a building (or design a government building in the case of an architect, engineering or contracting firm) that is energy efficient. The maximum deduction is $1.80 per square ft.
FOUR THINGS TO KNOW ABOUT THE LAW
The first thing you need to know is that for an energy efficient building to qualify, or partially qualify, it does not have to have grass growing on the roof or a windmill powering its electrical systems. In brief, you want to surpass 2001 ASHRAE standards — most current state codes already require this. The reality is that in working with hundreds of clients, alliantgroup (my firm) has found that the vast majority of new construction (and many energy efficient redos) will qualify or partially qualify for 179D just by meeting today’s stricter building code requirements.