On December 10, 2019, with the intent to fund the federal government through fiscal year 2020, Congress passed six appropriations omnibus or “minibus” bills (H.R. 1865). The $447 billion spending measure includes some tax and other provisions, including a provision for a Section 179D Energy Tax Credits extension. On December 19th, the Senate approved this funding bill. The President is expected to sign them into law. He must do by 11:59 PM on Friday, December 20, in order to avoid a government shutdown.
[UPDATE: This bill was signed into law on December 20, 2019. See our blog post about this and other fixed asset tax-extenders.]
The 179D commercial buildings energy efficiency tax deduction allows building owners to claim a tax deduction for installing qualifying energy efficient systems and buildings. Under the law, a tax deduction is available to owners of new or existing buildings who install interior lighting, building envelope, HVAC or hot water systems that reduce the building’s energy and power cost.
The 179D Energy Tax Credits law has been in effect since January 1, 2006, under the Energy Policy Act of 2005 (EPACT). It required systems and buildings to be placed in service by December 31, 2017, which is when the 179D credits expired. The 179D Energy extension would be retrospective from 2017, prospectively through 2020. This means that commercial buildings placed into service in years 2018, 2019 and 2020 will now qualify for the credit.
The law contains certain provisions that require qualified individuals and approved software to calculate the savings. Paragon’s fixed asset experts meet those requirements.
For more information about the 179D Energy Tax Credits, visit the government Office of Energy Efficiency and Renewable Energy.
Read more about potential savings under the tax law and how you may qualify.