EPAct-Created Section 179D Federal Tax Deductions Are Set To Expire In December

By Charles R. Goulding and Jennifer Pariante

With the passage of the Energy Policy Act of 2005, tax planning became an important consideration for a broad range of upgrades designed to improve energy efficiency. EPAct created Section 179D of the Internal Revenue Code, which provides federal tax deductions as incentives to make buildings more energy efficient. In 2013, energy efficiency tax planning has a special urgency. That's because the current Section 179D tax provisions are scheduled to expire on Dec. 31, 2013. A proposal to extend EPAct for three years, through Dec. 31, 2016, and to expand the beneficiary categories, has been introduced in the Senate. That proposal includes a new Section 179F, with a provision for a $4 per square foot tax deduction for so-called “deep retrofits.”

Also on the subject of energy and taxes, the 30 percent wind tax credit has been extended for projects commencing in 2013. Most other alternative energy tax credits are scheduled to expire Dec. 31, 2016.

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