§179D Public Buildings and the Energy Policy Act

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The 2005 Energy Policy Act is giving a much-needed tax break to architects, engineers and other designers of energy efficient government buildings. The Act allows private property owners a tax deduction of $1.80 per square foot for buildings that meet certain energy standards. Since government property owners don’t pay federal income taxes, the tax break for public entities can be assigned to the project’s designer. The purpose of this allocation is to encourage designers to design energy-efficient systems for public entities. Before applying for the benefit on his/her tax return, a designer obtains the signature of an authorized representative of the public entity on a simple allocation form that verifies basic information about the designer.

Urish Popeck can assist with every step of this process, including providing the third-party, independent engineer that is required to verify the building’s energy performance levels. Public buildings are currently defined as education projects(K-12 and higher education), military facilities, and buildings used by local, state, and federal governments. Other types of tax exempt entities are under consideration for inclusion in this benefit. Each square foot of a building whose HVAC systems, building envelope, and lighting systems meet or exceed a minimum reduction in energy costs versus a 2001 baseline qualifies for the deduction.

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Related Service: Green Energy Tax Services