179D Energy Efficient Building Deduction
The Energy Policy Act of 2005 (EPACT) is well known for offering consumers and businesses federal tax credits for purchasing fuel-efficient hybrid-electric vehicles and energy-efficient appliances and products.
A more pertinent piece of the legislation to businesses is the deduction for energy-saving building improvements or new construction. The property should have been in service after December 31, 2005 and before January 1, 2013 with a maximum deduction figured at $1.80 per square foot. The depreciable basis of property is reduced by the amount of the current deduction.
These tax deductions are awarded to eligible building components in the following categories:
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interior lighting system
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heating, cooling, ventilation, and hot water systems
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building envelope (windows, walls, foundations, slabs, ceiling, roof system, and insulation)