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Professional Design Consultants

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Professional design firms can also take part in claiming the energy efficiency deduction in addition to building owners claiming the 179D deduction.  Government buildings are not subject to tax, unlike building owners who pay tax.  Hence, the government-owned building’s designers are able to claim the deduction instead. Buildings such as education, military, and other local, state, and federal buildings are typically government buildings.

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Engineers, Architects, and General Contractors are professional service firms that can benefit most from these deductions.  These deductions are based on a first to come, first to serve; however, the deduction can be allocated to the multiple firms involved by the government entity. The professional service firms are allowed to go back 3 years to claim deductions for buildings placed in service during that time with this statute.

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The deductions are based on the square footage of buildings and can be as much as $1.80 per square foot. There are three building systems (listed below) that can be modeled and verified to meet the minimum ASHRAE Standards and each system can yield up to $.60 per square foot.

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Building Envelope

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HVAC & Hot Water Systems

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Lighting Systems

TYPES OF BUILDINGS THAT QUALIFY 

 

A common misconception is that buildings must meet LEED certification to qualify for the deduction. As previously stated, to qualify for the deduction, the building or renovation need only meet the minimum standards as set forth by ASHRAE standards. These building types include the following: 

 

Government Buildings – Designers of government-owned buildings may also claim the deduction. Designers such as architects, engineers, and contractors who have helped design energy efficient plans for building construction may claim the deduction as the government is not allowed to claim the deduction. Typical buildings that fall under this category include the following: 

 

  • Schools, Universities, Post offices, Courthouses, Airports, Government offices, and more. 

 

We use IRS approved modeling software to calculate the amount of the 179D deduction. In order to certify and seal the report per the IRS guidelines, our licensed professional engineers conduct site inspections and review calculations.

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Let TaxIncennovations evaluate how we can assist you in claiming energy efficient tax deductions.

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