Completed an energy efficiency project in 2020 or the first part of 2021? Don’t leave the 179D Deduction and/or 45 L off your tax filing. Let GCP’s in-house energy team and sustainability consultants, Emerald Built Environments (EBE) help you fulfill the required documentation needed to claim tax deductions and rebate incentives. We will provide the required energy modeling analysis and documentation to meet the specific tax code guidelines.
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The §179D Deduction is a Federal tax incentive promoting energy-efficient buildings for both new and existing structures. Further, architects, engineers, contractors, environmental consultants, or energy services providers may also be eligible for the incentive on public projects. This incentive is often referred to as the EPAct Deduction after the Energy Policy Act of 2005 that created it, or as the §179D Deduction, which relates to its tax code section. Commercial building owners can take a Federal tax deduction of up to $1.80 per square foot of the building’s floor area if they install certain property (e.g., efficient lights or HVAC systems, added wall or roof insulation, etc.) that reduces energy use. The §179D Deduction, which applies to both new construction and renovations, was set to expire in 2020, but is now permanent and annually adjusted with inflation.
The §45L Credit allows eligible developers to claim a $2,000 tax credit for each newly constructed or substantially reconstructed qualifying residence. It applies to single family homes, apartments, condominiums, assisted living homes, student housing, and other types of residences. The residences must not be more than three stories above grade in height. Like the §179D Deduction, §45L Credit was set to expire in 2020 however was extended through December 31, 2021.