Capturing green building tax incentives is a valuable opportunity for contractors, architects, designers and building owners to improve their budgets and maximize tax savings. Beneficial tax incentive programs such as the 179D tax incentive and 45L tax credit should be pursued by eligible businesses.
While the 179D tax incentive and 45L credit have not yet been extended for 2015, legislation is likely to extend these credits in 2015. What does this mean for your business? Companies who make investments in properties that qualify should continue to prepare for capturing these credits once they become available.
The two most important techniques for preparation are to gather as much information about the 179D tax incentive and 45L tax credit as possible and to work with a professional knowledgeable enough to assist you with questions you may have about these opportunities.Preparing For The 179D Tax Incentive
Due to the fact that this incentive will likely be renewed for 2015, it benefits your business to prepare to capture the 179D tax incentive in advance. The Section 179D tax incentive allows businesses to earn $1.80 per square foot in deductions for buildings that have been upgraded with a more efficient lighting plan, HVAC or building envelope.
Individuals who are qualified for this green building tax incentive include:
- Owners of energy-efficient commercial or multifamily properties that were built or retrofitted since December 31, 2005
- Architects, engineers, ESCOs and designers of energy-efficient municipal building projects (LEED-certified buildings easily qualify)
The 179D tax incentive offers the opportunity to significantly reduce taxes with a one-time accelerated depreciation for commercial, multifamily and public agency-owned facilities that have been upgraded with energy-efficient changes. In order to qualify for this tax credit, the IRS requires an independent third-party energy tax study.
Capturing The 45L Tax Credit
Another green building tax incentive to prepare for in the likely event that it is renewed in 2015 is the section 45L tax credit. This credit applies to single family and multifamily dwelling units that measure three stories or less.
Contractors responsible for dwellings that exceeded the 2006 Edition of the International Energy Conservation Code (IECC) heating and cooling budgets by 50% are eligible for a $2,000 tax credit.
In order to qualify, each unit must provide a level of energy efficiency that is higher than national energy standards. While this may seem like a stringent requirement, many newer developments already exceed these standards due to more recent energy standards and building codes.
Properties eligible for this green building tax incentive share the following characteristics:
- Dwellings are three stories or lower
- Properties include energy-efficient features such as high R-Value insulation and roofing, windows, doors or HVAC systems
While the 179D tax incentive and 45L credit have not yet been renewed, your business benefits by preparing to capture these credits instead of making last-minute preparations when their legislation is passed.
Maximize your tax savings by gathering the proper information, documenting investments and speaking with a qualified industry professional. A tax advisor has the expertise to assist you with planning ahead and ensuring you capture the credits for which your business qualifies.
Learn more about capturing valuable tax credits through tax incentive programs specifically for your business and your state.
