Over the years since the Energy Policies Act of 2005 came into being there have been several changes in the options that commercial business and commercial property owners, architects, contractor and engineers have to obtain a 179D deduction.
Unfortunately there are also many myths and misunderstanding that may be preventing commercial property owners or others from obtaining the deduction that they are actually eligible to receive. It is important to realize that this is not an automatic deduction and there are steps involved, including an on-site inspection and obtaining certifications from a third party that is able to provide this verification.
The Deduction Is Only for New Buildings
This is not correct and is a myth or misunderstanding that is keeping many commercial property owners from applying for the deduction that they would easily qualify for.
The 179D deduction can be applied to any building that has been constructed or renovated after December 31, 2005 and January 1, 2014. Buildings prior to that date do not qualify as the regulations and Act were not in place.
There Are Really No Savings and a Lot of Expense
This is perhaps the biggest error of all about the deduction as this can add up to a full $1.80 per square foot of space in the commercial building if you can be certified for all three subsystems.
The three subsystems include the heating and cooling system, the interior lighting system and the actual building itself, which is known in the act as the building envelope. This is perhaps the hardest subsystem to assess but with specific models energy efficiency can be clearly demonstrated, if present, to show that the building has reached the required energy efficiency.
The time that the building owner spends on preparing and assisting with the certification and analysis is very minimal. However, most companies encourage the building owner to be as actively involved in all aspects of the process as he or she is comfortable with. This allows for greater understanding and transparency between the independent third party preparing the report and the commercial property owner on the 179D deduction options.
