Section 179D Tax Deduction

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The Section 179D Tax Deduction

Section 179D Tax Deductions applies to energy efficiency improvements to a commercial building.

Pre-Inflation Reduction Act of 2022

  • Interior lighting systems. (25%)
  • Building envelope construction. (10%)
  • Heating, cooling, ventilation, and hot water systems. (15%)

In 2020 or prior years, the deduction was $1.80/ft² or $0.60/ft² per improvement. This means you can qualify for $0.60/ft² if you reach 25% in lighting, another $0.60/ft² if you reach 15% in HVAC, and another $0.60/ft² if you reach 10% in envelope.

In 2021 that rate increses with inflation to $1.82/ft² or $0.61/ft². In 2022 the rate jumps to $1.88/ft² or $0.63/ft².

Post Inflation Reduction Act