Questions about 179D

Can I apply for the tax deduction for only a part of my building?

No, the tax deduction applies to the energy performance of the whole building. (Source: DOE)

Can I apply for the tax deduction, even if the building upgrades do not achieve the savings predicted?

Qualification for the tax deduction is based on the building’s predicted energy performance, so the predicted levels must meet the specified savings levels. (Source: DOE)

Does the tax deduction apply to new construction and existing buildings?

Yes. The reference building models for determining the energy and power cost savings for new construction and retrofits of existing buildings are based on Standard 90.1-2001. The historical performance of existing buildings is not used for the energy savings calculations for tax deduction purposes. (Source: DOE)

If the building qualifies, can nonprofit organizations still qualify for the tax deduction?

No, this tax deduction is applicable only to building owners who pay taxes. However, tax-exempt organizations can allocate their tax deduction to the designer. (Source: DOE)

What documentation is required to show that I have met the requirements for the tax deduction?

The taxpayer claiming the tax deduction must obtain certification of the requirements from a qualified individual. The certification must contain the name, address, and phone number of the qualified individual; the address of the building; and a statement of performance matching the statements in IRS Notice 2006-52 (http://www.irs.gov/irb/2006-26_IRB/ar11.html). (Source: DOE)

What qualifies an individual to certify the documents?

The licensed contractor or engineer must be properly licensed in the same jurisdiction as the building, and not be related (within the meaning of 45(e)(4)) to the taxpayer claiming the deduction under 179D. (Source: DOE)

Which buildings do not qualify for the 179D tax deduction?

Single-family homes, multifamily buildings with three or fewer stories above grade, manufactured houses, and commercial buildings outside the United States do not qualify for the tax deduction. (Source: DOE)

Which energy modeling programs are qualified for verifying the 179D commercial building tax deduction?

The EERE website contains a full list of programs, versions, and requirements http://www1.eere.energy.gov/buildings/qualified_software.html. (Source: DOE)

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