Section 179D – Congress enhances tax deduction for energy-efficient buildings
Abstract: The Inflation Reduction Act (IRA) significantly enhanced the Section 179D deduction for energy-efficient commercial building improvements placed in service after 2022. Among other things, the IRA nearly tripled the maximum deduction to $5 per square foot under certain circumstances and made it easier for improvements to qualify for the deduction. The IRA also expanded eligibility for the deduction to include real estate investment trusts (REITs) as well as designers of buildings owned by nonprofit organizations, religious organizations, tribal organizations, and nonprofit schools or universities. This article details the enhancement to Sec. 179D.