Jennifer Chin, National Director of EPAct 179D

Many architects are not aware that their sustainable building designs for schools, government or municipal projects may qualify for the EPAct §179D tax deduction. §179D provides a tax deduction of up to $1.80 per square foot for designs that reduce the total energy and power costs by 50 percent or more when compared to an ASHRAE 90.1-2001 reference building. Partial deductions are also available.

A firm has the ability to go back three tax years to claim the EPAct §179D deduction for newly constructed or renovated properties substantially completed between 2007 and 2013.

For example, if a building was completed in 2007, you currently have the opportunity to amend that year’s tax return, potentially generating a refund from the IRS. However, the window for 2007 is closing. If you filed your 2007 return on March 15th, 2008, you have until March 15th, 2011 (three year statute) to amend that year’s return. Once the statute closes, that year’s tax return cannot be opened for purposes of taking this deduction.

Now is the time to begin evaluating your 2007 projects to understand if they qualify for the EPAct §179D tax deduction. Keep in mind that your firm will need time to select projects and have a third-party firm evaluate and certify them for the deduction. Also, your tax provider will need to prepare and file the tax return before the statute closes. Don’t leave money on the table — time is of the essence in claiming this deduction for 2007 properties!