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Projects placed in service in 2026 that qualify for the Section 179D deduction will be eligible for new, inflation-adjusted per-square-foot deduction rates under Revenue Procedure 2025-32 released October 14, 2025. For designers, architects, and engineers planning to claim these deductions, here’s what has changed and how to adapt.

In the fast-paced world of commercial real estate and construction, the Section 179D tax deduction is a powerful tool for encouraging energy-efficient buildings. It offers significant tax savings for newly constructed buildings or upgrades to interior lighting, HVAC, and building envelope systems. But with the One Big Beautiful Bill Act (OBBBA) introducing changes effective as of July 4, 2025, and confusion around deadlines, forms, and compliance causing hesitation—especially among architects, contractors, and design professionals—it's easy to get tripped up by misinformation. You've likely heard colleagues venting about hurdles associated with securing allocation letters or questioning if retrofits even count.

Section 179D: A New Chapter Begins