EPACT Study: Section 179D Tax Deduction


Hamilton Kwon

Norbert Crabtree
Managing Director

Jennifer Birkemeier

Under the Energy Policy Act of 2005 (EPAct) Owners and Designers of new and existing energy efficient commercial buildings are eligible for up to $1.80 per square foot tax deduction. For example, the deduction for a qualifying 100,000 SF building could be up to $180,000. The $1.80 can also be split across the three building systems listed below of up to $0.60 per square foot per system. This deduction is known as the Section 179D Tax Deduction for Energy Efficient Commercial Buildings.

There are three building systems that contribute to the deduction: the building envelope, HVAC, and lighting systems.

A building will qualify for the EPAct deduction when a building’s energy usage is reduced by 50% or more compared to a baseline ASHRAE 90.1-2004 standard. Each building system may qualify separately for up to $0.60 per foot

Buildings must have been placed into service on or after January 1, 2006 and before January 1, 2018.

How the Client Benefits

For Building Owners: New construction and remodels including lighting, HVAC, and building envelope upgrades and expansions.

For Building Occupants: EPAct deductions may be available to occupants who make lighting and HVAC upgrades.

Architects and designers of public or government building are eligible for EPAct deductions of up to $1.80 per square foot as well by allocation by the public agency to the architect or designer.

Please contact us for more information and case studies.

Ideal Candidates

Ideal candidates are commercial buildings or building improvements covering a minimum of 50,000 square feet. Improvements could range from lighting and HVAC upgrades to new construction. The term “commercial buildings” includes office buildings, industrial structures, warehouses, retail structures and apartment dwellings four stories or greater.

MCCL Specialty Tax Solutions Advantage (MCCL-STS)

In order to take advantage of the Section 179D deduction, the IRS requires an energy modeling study that compares the proposed or existing building’s energy usage to that of a baseline building’s. STS combines an energy modeling solution specified by the IRS and our tax expertise to generate an EPAct study required for the 179D deduction.

Our experience and expertise ensures that your clients receive a quality EPAct report with audit support up to the appeals process.

For more information about Specialty Tax Solutions, contact Norbert Crabtree at 847-527-1234 or 864-593-6131; ask for Specialty Tax Solutions or email us: Norbert Crabtree