Green Building Tax Deduction

The Energy Policy Act of 2005 added section 179D to the Internal Revenue Code. Section 179D permits a deduction for the costs of installing certain energy efficient building systems in commercial buildings.

 
To claim the deduction, a taxpayer must obtain a certification of energy savings. The certification process must be performed by a qualified firm or individual that performed an on-site inspection of the building. The energy savings must be calculated using qualified software from the Treasury Department’s list of certified software programs. Axiom’s staff includes engineers that are qualified and certified to perform Green Building studies. 
 
Green Building 179D Energy Efficiency Tax Deductions
A tax deduction of up to $1.80 per square foot is available for improving the energy efficiency of existing commercial buildings or making the conversion to high efficiency systems. Investments that appreciably reduce the heating, cooling, water heating, and interior lighting energy cost of new or existing commercial buildings are eligible for a tax deduction. 
 
Overview of Axiom’s Green Building Study Process
  • Review specifications and determine if building qualifies
  • Site visit
  • Certified engineer performs the energy modeling and analysis 
  • The study is completed and turned over to the building owner and their financial advisor
 
Audit Support
As with many tax incentives, there is a chance for an IRS audit. In the event of an audit, our fee for the study includes 40 hours of audit support. Axiom feels comfortable in providing audit support because our engineers are experienced in complying with rules and regulations as required by the IRS. In addition we feel our studies will withstand IRS scrutiny because we follow the methodologies recommended by the IRS.
 
The Next Step
If you are a building owner or a CPA firm with clients that you think might qualify, contact us at 800-915-7120.  Let our certified engineering professionals help you determine if you can take advantage of this great tax incentive and if so, maximize your deductions.