What is the 179D federal tax deduction?
Section 179D of the Federal Tax Code provides a tax deduction for energy efficiency improvements to commercial buildings. A building may qualify for a tax deduction under Section 179D not to exceed $1.80/ft² for whole building performance or $0.60/ft² for a partially qualifying property for envelope, heating, ventilating, and air conditioning (HVAC), or lighting improvements. In addition, a building may qualify with a reduced installed lighting power under the interim lighting rule. Energy simulations are required to show compliance with the energy and power cost savings requirements. View more detailed information.
What is the 179D DOE Calculator?
The 179D DOE Calculator is a DOE approved tool that provides calculations to determine eligibility for the 179D federal tax deduction as a substitute for other modeling software. The 179D DOE Calculator provides pre-simulated results to determine qualification for both the partial and interim compliance pathways.
Is my building eligible to use the 179D DOE Calculator?
Although many common building types are included in this tool, some building types and configurations may not be eligible. By clicking on the "Start your Estimate" button below, you will enter the 179D DOE Calculator and be asked to enter six building characteristics to determine your eligibility. If a building is not eligible to use the 179D DOE Calculator, qualification for the 179D tax deduction can be determined with separate modeling using a different modeling tool.
Eligible buildings can use the 179D DOE Calculator to determine qualification for lighting, envelope, and HVAC system. A 179D DOE Calculator Results Report will be provided as documentation of the qualification and eligibility status. The report does not preclude the need for a certification of the property performance from a qualified individual (a licensed contractor or engineer in the jurisdiction of the building location).
What are the different compliance pathways for qualification for the 179D tax deduction?
There are three compliance pathways to qualify for the 179D federal tax deduction:
- Whole building qualification with 50% energy and power cost savings shown through energy simulation (not covered by this tool).
- Partial qualification for envelope, HVAC and HW, and lighting with energy and power cost savings with threshold options:
- 16 2⁄3% envelope, 16 2⁄3% HVAC, 16 2⁄3% lighting effective January 1, 2006 through December 31, 2008.
- 10% envelope, 20% HVAC, 20% lighting effective January 1, 2006 through December 31, 2014.
- 10% envelope, 15% HVAC, 25% lighting effective March 12, 2012 through December 31, 2014.
- Partial qualification through the interim lighting rule based on reductions in installed lighting power.