179D is a tax deduction for energy efficient commercial buildings. It allows a deduction to a taxpayer for part or all of the cost of energy efficient commercial building property. The maximum amount of the 179D deduction cannot exceed the product of $1.80 and the square footage of the building.

Does my building qualify?

To determine if your building qualifies for the 179D you can use the 179D DOE Calculator. However this calculator does not include all building types. If your building is not included in this calculator please contact us for information about whether or not your building qualifies.

The property must satisfy a number of conditions to be determined “energy efficient commercial building property”

  1. The property is installed on or in any building that is located in the United States
  2. The property is installed as part of the interior lighting systems; the heating, cooling, and ventilation, and hot water systems; or the building envelope and
  3. It is certified that the interior lighting systems, heating, cooling, ventilation, and hot water systems, and the building envelope that have been incorporated into the building, or that the taxpayer plans to incorporate, will reduce the total annual energy and power costs by 50 percent or more.

If your building does not reach the intended 50 percent reduction you can receive a partial deduction that cannot exceed the product of $0.60 and the square footage of the building.

There is also an interim lighting rule, which is an alternate method of calculating a partial deduction for interior lighting systems. The partial deduction is valid if a lighting system reduces the lighting power density of the building by more than 25 percent (50 percent in the case of a warehouse).

For more information please visit the IRS website or contact us to see if you could qualify.

Click here for the 179D DOE Calculator

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