Update: Tax Extenders Finalized (45L & 179D Energy Efficiency Incentives Extended to 2020)

by Austin Bewley, EIT, Engineering Associate of BRAYN Consulting

December 20th, 2019

The president signed into law a $426 billion tax cut plan that, among other things, extended several expired provisions of the tax code. The last major extenders package was almost 2 years ago to extend most provisions through 2017, but the new extension will cover the two-year gap as well as allow business owners to plan for the future.

The new tax cut package includes the extension of two lucrative energy efficient incentives: The Energy Efficient Home Tax Credit (45L) and The Energy Efficient Commercial Building Tax Deduction (179D).

45L Tax Credit

The extension of 45L through the end of 2020 is GREAT NEWS for home builders and apartment developers. The federal tax credit is $2,000 per dwelling unit for exceeding certain energy efficiency standards and is to be claimed in the tax year each unit is first sold or leased. The credit can be claimed for newly constructed and substantially renovated homes and apartments. Claiming the credit requires energy modeling, inspections, and certification from an eligible certifier. Since 45L has been extended through the end of next year, developers can now get ahead of the ball by scheduling inspections for their units BEFORE they are sold.

Apartment Developer Case Study

179D Tax Deductions

Architects, engineers, and contractors that have worked on government building projects constructed between 2018 – 2020 are now eligible for 179D deductions. The federal tax deduction is up to $1.80 per square foot of the constructed or renovated building. Commercial property owners are also eligible. If you or your client has performed qualified work on a government building, like a school, state university building, military base, etc., then this is a great time to secure an allocation letter to lock down potentially hundreds of thousands of dollars in tax deductions.

Architecture Firm Case Study

More information on 179D can be found here.

BRAYN is a team of attorneys, engineers, and accountants that work with businesses and their CPAs to identify lucrative federal and state tax incentives and have completed thousands of 179D and 45L studies. We have licensed professional engineers and RESNET certified raters that perform all our studies in-house, and attorneys experienced in tax controversy to back them up. We are known for our exceptional client service and our knowledge of the architecture, engineering, and construction industries.

Make sure to reach out to get your FREE Phase 1 Assessment with estimated tax benefits and fixed-fee proposal.

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BRAYN Consulting, LLC

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