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179D and 45L Tax Incentives: Qualifications, Impact of Inflation Reduction Act, Caveats, Practical Examples

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, May 24, 2023

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This webinar will explain qualifying for 179D and 45L tax incentives for tax professionals working with businesses owning, designing, building, and constructing property. Our panel of experts will review the benefits, qualifications, and caveats of these lucrative tax rewards for constructing and installing energy-efficient property.

Description

Energy efficient properties not only help sustain the environment, but they can also qualify for generous tax credits and deductions. The Section 179D deduction allows for an up to $5.00 per square foot tax deduction for qualified, commercial, and residential buildings and improvements. Building envelope, HVAC and hot water systems, and interior lighting can all qualify. Among the businesses that can benefit the most are owners of buildings for real estate, manufacturing, and healthcare organizations as well as designers (architects, engineers, contractors) of buildings for government and tax-exempt entities.

Also available are Section 45L tax credits. This credit has been around since 2005. Offering a $2,000 credit per dwelling unit available, prior-year tax returns can be amended to provide cash for qualified improvements made in open years. Multifamily developments, residences, and condominiums could all qualify for this credit of $2,000 a unit. For large complexes with multiple units, the savings can be remarkable. The Inflation Reduction Act significantly increased the credit to $2,500 per residential unit and to $5,000 for these same homes that meet DOE Zero Energy Ready Home standards.

In addition to meeting qualifying guidelines, both incentives require certification from an eligible professional. Tax practitioners working with businesses need to understand the benefits and caveats of these tax incentives.

Listen as our panel of tax incentive professionals discuss the 45L credit and 179D deduction for advisers working with clients constructing and improving buildings.

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Outline

  1. 179D and 45L tax incentives: introduction
  2. History of 179D and 45L including relative case law
  3. 179D and 45L and the Inflation Reduction Act
  4. Qualifying for 179D and 45L tax incentives
  5. Caveats of 179D and 45L
  6. 179D and 45L examples

Benefits

The panel will cover these and other key issues:

  • Qualifying requirements for 179D deductions
  • Buildings eligible for the 45L credit
  • Examples of specific energy-efficient property and relative 179D deductions
  • Caveats to consider relative to these tax incentives
  • The impact of the Inflation Reduction Act on 179D deductions and 45L credits

Faculty

Bacon, Mark
Mark Bacon
Practice Lead - Energy Incentives
Leyton

Mr. Bacon is a Professional Engineer with over 17 years of experience. His expertise lies in energy efficiency, team...  |  Read More

Crowley, Maggie
Maggie Crowley
Head of Strategic Development
Leyton

Mrs. Crowley brings 10 years of experience in creating profitable strategic partnerships. She has successfully launched...  |  Read More

Medrek, Devin
Devin Medrek
Financial Consultant Team Lead
Leyton

Mr. Medrek is a financial expert in the R&D Tax Credit and Employee Retention Credit. He is backed with robust...  |  Read More

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