MAXIMIZE the 179D Tax Deduction

Energy-Efficient Tax Savings for Commercial Buildings in California

TaxTaker works for green building owners and designers in California to save money through energy-efficient improvements.

About 179D Program

Section 179D offers lucrative tax deductions for businesses investing in energy-efficient improvements in commercial buildings in California. Whether you're renovating your existing structure or constructing a new one, there's a potential to claim up $5+ per square foot. And with TaxTaker by your side, every step is simplified.

What Type of Buildings Qualify?

Commercial
Multi-Family
Industrial, Office
Parking Garages
Schools
Churches
Hospitals
Big Box Retail
Hotels

HOW THE 179D TAX DEDUCTION HELPS YOU SAVE

The Benefits of the 179D Tax Deduction in California

Reduce Your Tax Liability
By claiming the 179D deduction, commercial building owners in California can reduce their taxable income significantly, freeing up capital that can be reinvested in your business or used for future projects.
Increase Energy Efficiency
Investing in energy-efficient improvements not only lowers operational costs but also qualifies your building for valuable tax deductions under 179D, creating long-term savings and sustainability.
Maximize Profitability
Through strategic energy-efficient upgrades, you can increase your building’s profitability. The 179D deduction enables you to reduce initial project costs while boosting your overall return on investment.

Who in California Can Benefit from the 179D Deduction?

Building Owners

Building owners in California who make energy-efficient improvements to their properties can unlock substantial tax savings through the 179D deduction. Whether you own a small office building, a retail space, or a large industrial complex, this tax incentive allows you to reduce your tax burden by implementing environmentally sustainable upgrades. The 179D deduction rewards you for making energy-saving changes such as upgrading to energy-efficient lighting systems, improving HVAC systems for optimized heating and cooling, or installing high-performance insulation that reduces overall energy consumption.

For building owners, the 179D deduction offers a powerful way to recoup a portion of the capital investment required for these upgrades. By qualifying for up to $5.00 per square foot in deductions, owners can realize immediate and long-term cost savings, both in terms of reduced energy bills and tax savings. Additionally, energy-efficient buildings can enhance property values and tenant satisfaction, making them more attractive to environmentally conscious businesses or organizations.

Architects, Engineers, and Designers

Architects and engineers in California play a crucial role in the design and construction of energy-efficient buildings, and they too can benefit from the 179D tax deduction. While traditionally the deduction has been claimed by building owners, the 179D deduction also provides unique opportunities for architects, engineers, and contractors working on government-owned properties. When these professionals design energy-efficient features—such as advanced lighting systems, high-efficiency HVAC systems, and building envelopes for government-owned or public-use buildings—they are eligible to claim this deduction for their contributions to reducing energy consumption.

The 179D deduction is a key incentive for architects and engineers looking to promote sustainable design practices. It not only provides financial benefits but also supports your reputation as a leader in green building. Whether you're designing new government buildings or retrofitting existing ones, the 179D deduction offers a chance to claim up to $1.80 per square foot for energy-efficient design. This makes it an attractive incentive for firms looking to increase their project margins while contributing to sustainable development goals.

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What Building Improvements are Eligible under 179D?

Building Envelope
Enhancements to insulation, roofing, windows, and doors.
HVAC Systems
Opting for high-efficiency heating, ventilation, and cooling systems.
Interior Lighting
Installing LED lighting, smart lighting controls, and daylight sensors.
Solar Integration
Harnessing solar power or geothermal systems with cutting-edge technologies.
Hot Water Systems
Efficient water heaters reduce energy usage and can qualify for 179D.
Smart Energy Systems
Automated energy controls optimize usage for energy-efficiency deductions.

Maximizing Your 179D Deduction with California-Specific Opportunities

State-Specific 179D Eligibility and Incentives in California

In addition to the federal 179D tax deduction, each state offers unique energy-efficiency requirements and local incentives that can further enhance your tax savings. Understanding these state-specific eligibility factors and taking advantage of additional incentives will ensure you maximize your return on energy-efficient improvements.

California and Local Energy-Efficiency Incentives

In addition to the federal 179D tax deduction, California offers a variety of local incentives to encourage energy-efficient upgrades and sustainable building practices. These programs can significantly reduce the costs associated with energy improvements.

  1. California Electric Vehicle Infrastructure Project (CALeVIP): CALeVIP provides rebates for the installation of electric vehicle charging stations, helping commercial property owners support EV infrastructure while reducing installation costs. [1]
  2. California Energy Design Assistance (CEDA): CEDA offers financial assistance for energy-efficient design in new commercial buildings, helping reduce energy costs through better planning and technology. [2]
  3. City of San Francisco - GreenFinanceSF: This program offers financing options for energy efficiency and renewable energy projects, helping property owners in San Francisco fund their sustainable building upgrades. [3]
  4. IID Energy - Commercial Rebate Program: IID Energy offers rebates for energy-efficient improvements in commercial buildings, reducing the cost of implementing new technologies like HVAC and lighting upgrades. [4]
  5. San Diego County - Green Building Program: San Diego County provides rebates and incentives for energy-efficient upgrades in commercial properties, helping lower energy costs and improve building performance. [5]
  6. Silicon Valley Power - Emerging Technologies Grant Program: This grant program supports the adoption of emerging energy-efficient technologies in commercial buildings, providing financial support for innovative projects. [6]
  7. SoCalGas - Non-Residential Energy Efficiency Rebate Programs: SoCalGas offers rebates for energy-efficient equipment installations, helping businesses reduce energy usage and operating costs. [7]

City-Specific Green Building Requirements in California

California cities have implemented rigorous green building codes to promote energy efficiency and sustainable construction practices. These building codes often align with the 179D tax deduction, providing additional opportunities for commercial property owners to maximize their energy-efficiency savings.

City of San Francisco - Green Building Code

San Francisco’s Green Building Code ensures that both new construction and major renovations meet energy efficiency and sustainability standards. By following this ordinance, property owners can reduce energy use and qualify for federal and local incentives.

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City of San Jose - Private Sector Green Building Policy

This policy mandates energy-efficient design and sustainable building practices for private sector projects, ensuring that commercial developments meet local and state green building standards.

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Los Angeles County - Green Building Program

LA County's Green Building Program promotes energy efficiency in new and existing buildings. Compliance with these regulations can help building owners reduce energy consumption and become eligible for green building tax incentives.

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Santa Clara County - County Green Building Standards Code

This code provides comprehensive standards for sustainable construction and energy efficiency in Santa Clara County, helping building owners lower energy costs and align with federal deduction opportunities.

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City of San Diego - Sustainable Building Policy

San Diego’s Sustainable Building Policy encourages energy-efficient construction practices, helping commercial property owners qualify for local and federal incentives.

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Frequently Asked Questions

Talk to an expert. No hard sell, ever. We only want to work with you if it's a fit.
Why TaxTaker?

Our specialized accounting and engineering teams have been securing these tax incentives for over a decade. Our highly specialized experience means your business is positioned for the maximum amount of benefit, with the confidence that you've got an accurate and complete deliverable every time. So far we have completed thousands of studies and saved our clients more than $100 million.

We also respect and want you to keep your existing accountant and bookkeeping relationships. We simply cover specific portions of the federal tax code with the finest precision so your existing teams are well supported and you spend your time doing what you do best: building your company - while getting lots of money back every year!

Has my CPA already taken these energy efficiency incentives for me?

It is possible that your CPA has taken other deductions but not necessarily the 179D Tax Deduction. Incentives like 179D and 45L require an in person site visit from an engineer that most CPA’s are not qualified to perform.

Are the energy incentives in the Inflation Reduction Act legit?  

Yes, the energy incentives in the Inflation Reduction Act (IRA) are legitimate and have been designed to promote investments in renewable energy, energy efficiency, and the transition to a cleaner energy economy.  

The Inflation Reduction Act (IRA) introduced several significant updates to key tax incentives, including the Investment Tax Credit (ITC), Section 179D for energy-efficient commercial buildings, Section 30C for alternative fuel vehicle refueling property, and Section 45L for residential energy-efficient property.

When's the best time to see if I'm eligible for these energy incentives?

The best time to evaluate energy incentives like the 179D deduction, 45L tax credit, and the Investment Tax Credit (ITC) is right at the beginning of your project planning phase. Doing this early allows you to design your project to meet specific requirements, ensuring you qualify for maximum benefits and can plan your budget effectively. It also helps you integrate energy-efficient technologies and renewable energy systems from the start, rather than retrofitting later, and gives you ample time to gather necessary documentation for compliance.

What are TaxTaker’s fees?

Working with TaxTaker is risk free. TaxTaker collects a success fee only if you qualify for a tax credit.

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