In general, barring any changes or notices/guidance from the U.S. Treasury Department, the certification requirement for §179D Tax Deduction will be the same as they have always been with the following adjustments:
The qualification criteria changes that will be effective for properties placed in service from January 1st, 2023 through December 31, 2032, are as follows:
(Placed in Service 01/01/2023 or Later)
(Placed in Service Before 12/31/2022)
Includes Inflation Adjustment add-on
Includes Inflation Adjustment add-on
Partial Deductions Available Based on Energy Qualifications and Labor Requirements
Partial Deduction Available depending on energy savings per category (Lighting, HVAC, Building Envelope)
5x Multiplier in effect for compliance with Prevailing Wage and Apprenticeship Requirements
Labor Requirements do not affect legacy §179D Tax Deduction Amounts
Expanded to include ALL tax-exempt organizations
Only Government Building Owners may Allocate §179D to designers.
Can no longer use partial system analysis for qualification
Labor Requirements do not affect legacy §179D Tax Deduction Amounts
If new capital expenditure occurs private sector can be re-certified every 3 years, and tax-exempt every 4 years
Prior to IRA changes §179D was only available up to $1.80/sf over the life of a building
ASHRAE 90.1-2007 is the standard through 12/31/2026, increases to 90.1 2019 after 1/1/2027
ASHRAE 90.1-2001 through 12/31/2014 and 90.1 2007 between 1/1/2015 and 12/31/2026
Retrofits may use Energy Use Intensity methodology (Pre and Post Retrofit Measurement and Verification)
A simplified methodology for the lighting category maybe used, with additional partial qualification opportunities.
Public Law No: 117-169: The Inflation Reduction Act of 2022; expands §179D and §45L drastically, increasing the §179D Tax deduction amount up to $5.00 per square foot, adding new methodology for certification of the deduction, including benefit for non-profits and tribal governments, in addition to increasing the ASHRAE Standards and adding a Prevailing Wage and Apprenticeship requirements.
2022-61 IRB: Notice 2022-61: Prevailing Wage and Apprenticeship Initial Guidance under §45(b)(6)(B)(ii) and Other Substantially Similar Provisions
Discover the potential benefits of the EPAct §179D Tax Deduction for your company. Start by taking our brief eligibility quiz.
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