Evaluate Deductions for Qualifying Building Systems and Energy Savings
The Section 179D deduction may benefit commercial building owners and certain designers of government or tax-exempt buildings when qualifying energy-efficient property is installed through new construction or building improvements. Monetek helps evaluate projects involving interior lighting, HVAC, hot water systems, and building envelope upgrades to determine whether a deduction opportunity may exist. The process includes reviewing eligibility, documentation, certification requirements, and project timing. Because Section 179D is now a time-sensitive opportunity, this service is focused on eligible projects that began construction before June 30, 2026.
What is Section 179D?
Section 179D is a federal tax deduction for qualifying energy-efficient commercial building property and certain retrofit property. The deduction may apply when energy-efficient improvements are installed as part of a building's interior lighting systems, heating, cooling, ventilation, hot water systems, or building envelope.
The deduction was expanded under the Inflation Reduction Act and can vary based on energy savings, project timing, and whether prevailing wage and apprenticeship requirements are met. For 2025, IRS guidance lists deduction ranges from $0.58 to $1.16 per square foot for the base deduction and $2.90 to $5.81 per square foot when prevailing wage and apprenticeship requirements are met.
Important Deadline Update
Current IRS guidance related to Public Law 119-21 states that the Section 179D deduction will not be allowed for any property where construction begins after June 30, 2026. Projects that begin construction before that date may still require careful review of placed-in-service timing, energy modeling, certification, and documentation requirements.
Who may be Eligible?
Owners of qualified commercial buildings
Designers of qualified property installed in buildings owned by specified tax-exempt entities
Architects, engineers, designers, and contractors who may receive an allocation from eligible building owners or specified tax-exempt entities
Tax-exempt entities, governments, schools, religious organizations, tribal governments, and other eligible building owners or project stakeholders
What Types of Buildings and Systems are Reviewed?
Section 179D generally focuses on commercial buildings located in the United States and qualifying improvements related to interior lighting, HVAC and hot water systems, and the building envelope. Energy savings must generally be certified against applicable ASHRAE standards and meet required thresholds.
How Monetek Helps
Monetek helps evaluate whether a building project may qualify, identify the required documentation and certification steps, review project timing, and coordinate with advisors and project stakeholders. Because 179D depends on technical building performance and current tax rules, early review can help avoid missed documentation or timing issues.
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