Posted by Robert Hancock on 01.04.21
The passing of the COVID-relief package titled the ‘Consolidated Appropriations Act, 2021‘ (“CAA 2021”) extended the §45L Energy Efficient Home Credit (§45L Credit) through December 31, 2021 and made permanent the §179D Energy Efficient Commercial Building Deduction (§179D Deduction). These two valuable tax incentives encourage energy efficient design in both residential and commercial construction.
45L: Low-rise apartment developers and homebuilders are eligible for a $2,000 tax credit for each new or rehabbed energy efficient dwelling unit that is first leased or sold by the end of 2021. The energy efficiency criteria remain unchanged from before. Taxpayers also have the ability to amend returns to claim missed tax credits from previous years
179D: Tax deductions of up to $1.80 per square foot for energy efficient commercial building property have been made permanent. Deductions will increase annually, starting in 2021 to account for inflation. Likewise, the energy efficiency criteria have been made more stringent to use the most recent version of the ASHRAE Standard 90.1, published two years before the start of construction. Previously, energy cost savings were simulated against a reference building using ASHRAE Standard 90.1-2007.
Although these incentives have been in place for well over a decade very few taxpayers are taking advantage of them. Tax Point Advisors will provide a complimentary analysis to determine if these can apply to your property, and if so, provide the required third-party certifications and other assistance to claim the benefits in accordance with the IRS regulations. For a free consultation, please contact a Tax Point Advisor representative.