MAXIMIZE the 179D Tax Deduction
Energy-Efficient Tax Savings for Commercial Buildings in New York State
About 179D Program
What Type of Buildings Qualify?
HOW THE 179D TAX DEDUCTION HELPS YOU SAVE
The Benefits of the 179D Tax Deduction in New York
Who in New York Can Benefit from the 179D Deduction?
Building owners in New York 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 and engineers in New York 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?
New York State and Local Energy-Efficiency Incentives
In addition to the federal 179D tax deduction, New York offers several energy-efficiency incentives that support building upgrades and sustainability initiatives. Property owners can take advantage of these programs to reduce project costs and improve building performance.
- Alternative Fuels and EV-Recharging Property Credit: This tax credit incentivizes the installation of alternative fuel and electric vehicle recharging stations, supporting the development of green transportation infrastructure. [1]
- Local Option - Real Property Tax Exemption for Green Buildings: New York property owners can receive a tax exemption for meeting green building standards, reducing property tax liabilities for energy-efficient developments. [2]
- NY Green Bank: The NY Green Bank provides financing for energy-efficient and renewable energy projects, helping property owners access capital for sustainable building improvements. [3]
- Refundable Clean Heating Fuel Tax Credit (Corporate): This corporate tax credit incentivizes the use of clean heating fuels, offering refundable tax credits to businesses that adopt sustainable heating solutions. [4]
- NYSERDA - Industrial and Process Efficiency Performance Incentives: This program offers incentives for businesses to improve their energy efficiency, particularly in industrial processes, reducing energy use and operational costs. [5]
- Solar Energy System Equipment Credit: This tax credit incentivizes the use of solar equipment through an additional 25% of qualified expenditures, up to $5,000. [6]
- Business Energy Investment Tax Credit (ITC): This federal tax credit supports the installation of renewable energy systems, such as solar and wind, offering financial incentives to businesses that invest in clean energy. [7]
- Renewable Electricity Production Tax Credit (PTC): The PTC provides financial incentives to businesses that produce electricity from renewable energy sources, helping offset the cost of energy production. [8]
City-Specific Green Building Requirements in New York
New York has implemented a range of green building regulations that align with the goals of energy efficiency and sustainability. These city-specific standards can help building owners meet both local and federal energy-efficiency goals, including eligibility for the 179D tax deduction.
Local Law 97
This law aims to reduce greenhouse gas emissions from large buildings in New York City. Property owners are required to meet strict energy-efficiency standards to reduce emissions, which can also help qualify for 179D deductions.
Guidance for Local Wind Energy Ordinances
This resource provides guidance for municipalities in New York to promote the development of wind energy projects, helping property owners integrate renewable energy solutions into their buildings.
New York City - Energy Conservation Requirements for Existing Buildings:
These regulations aim to improve energy efficiency in existing buildings, particularly through retrofitting and energy-saving technologies. Property owners who comply with these standards may also be eligible for 179D deductions.
Building Energy Code
New York’s statewide building energy code sets standards for energy efficiency in new and renovated buildings, helping property owners reduce energy consumption and become eligible for tax incentives.
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Frequently Asked Questions
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!
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.
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.
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.
Working with TaxTaker is risk free. TaxTaker collects a success fee only if you qualify for a tax credit.
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