EPAct §179D Certification for Energy Efficiency Projects
You may be eligible for a federal tax deduction of up to $1.80 per square foot for improving the energy efficiency of your existing commercial buildings. This also applies to new construction and for government and non-profit buildings. §179D Originating as part of the Energy Policy Act of 2005, this incentive expires at the end of 2013.
Third-party certification is required to claim this incentive, and Capital Review Group is a third party certifier. With our certification comes assurance that your energy project will achieve maximum value from the perspective of engineering and technical performance as well as incentives and financial performance. Beginning with certification, CRG will apply additional tax-related strategies to enhance financial performance.
Returns on investment in energy efficiency projects are generally quite favorable when incentives are applied. However, capturing all beneficial tax effects requires that both engineering and tax strategy are performed in sync — this is where CRG adds exceptional value for our clients.
Capital Review Group is one of the leading national §179d third-party certifiers, certifying projects since 2006. Our experience has helped us to simplify the certification process and allow us to offer the most competitive fees in this professional specialty. We complete all required energy modeling, site verification and reports for certification according to IRS Section §179d guidelines, providing the final report to you for your tax preparer so they may claim the deduction on your taxes.
WHAT IS IT?
An IRS Code section that allows for a federal deduction for the installation of energy efficiencies in real property. Effective dates from 1.1.2006 through 12.31.2013.
Energy efficiencies are considered to be: Lighting, HVAC and Water Heater, Envelope or all of these as “Whole Building”. The deduction for each is $.60/square foot for: Lighting, HVAC and Envelope or $1.80/square for Whole Building.
WHAT MAY QUALIFY?
Commercial properties for retrofit, new construction or tenant-owned assets – owners of the assets may take the deductions.
Public buildings (government: federal, state, county, municipal, etc..) which have implemented energy efficiencies while tax exempt may “Allocate” the deduction to the “primary designer(s)” (Architects, Lighting Designers and Mechanical Engineers).
WHAT DOES NOT QUALIFY:
Not-for-profits (501(c) corporations), sovereign nations.
STATUS OF PROPERTY/ASSET OWNER?
Usually anticipating a tax liability – or has a tax liability. The deduction may be carried forward.
CATCH UP SINCE 2006?
The IRS allows the private sector owner of the assets to go back in time (even though the years may be considered “closed” tax years) to 1.1.2006 to “catch up’ on the missed deductions. This is completed via a “Change in Method of Accounting” IRS Form 3115. No tax return amendment is necessary, but is available for open years.
“Primary Designers” – may go back to “open” years– or three years from date of filing.
Lighting as a stand-alone (Interim Rule): Analysis determines whether the watts per square foot and the necessary controls are present.
HVAC or Envelope or Whole Building: Engineering analysis (modeling using IRS required, DOE approved software) to determine which system(s) qualify for federal deductions.
Contact us to find out more and to see if your building qualifies.