08/13/2022
For Immediate Release Aug. 2022: Congress Passes Inflation Reduction Act with 179D Energy-Efficient Commercial Building Tax Deduction Expansion
Beginning January 1, 2023, the EPAct 179D tax deduction will be increased. Energy reduction (ER) will be changed from 50% to 25% compared to the most recent ASHRAE Standard 90.1 determination no later than four years prior to the placed-in-service date.
After January 1, 2023, the deduction will be reduced to $.50 per square foot, plus $.02 for each percentage point above 25% ER, not to exceed $1.00 per square foot; OR taxpayers can claim the bonus deduction for $2.50 per square foot, plus $.10 per square foot for each percentage point above 25% ER, not to exceed $5.00 per square foot IF the prevailing wage requirement is met.
179D now requires new qualified retrofit plan qualifications and removes partial benefit allowances.
The 179D deduction expansion will allow 179D deductions to be allocated to any non-profits, tribal properties, and REITs.