PATH Act extends Section 179D!

December 18, 2015

It’s finally done.

The massive year end package in Congress that included the Omnibus spending bill and a host of other laws has been passed — and it included the tax extenders package, which made important changes to Section 179D.

Most importantly, it renewed Section 179D for 2015 (retroactively) and 2016. It did not make the package permanent, as some earlier reports suggested it might, but it gives taxpayers whose buildings are placed in service in 2016 a degree of certainty about the deduction not available in the previous two years

It also made two important modifications:

  • The deduction now applies to non-profit and tribal government buildings, in the same fashion as for government buildings — non-profit and tribal government building owners can allocate the deduction to designers who created energy-efficient systems.
  • In 2016, the standard for modeling energy efficiency will be made more stringent, from ASHRAE 90.1-2001 to ASHRAE 90.1-2007, which the Department of Energy anticipates will reflect energy efficiency improvements of approximately 9–18 percent in baseline modeling.

Over the summer, Concord undertook a regulatory review study on this change in standards and presented it to the Senate Finance Committee. We found that the proposed lighting efficiency improvements would affect about 2 percent of deductions, while HVAC efficiencies would affect about 9.6 percent of qualified deductions. These impacts could result in no (or reduced) deductions for less than 12 percent of studied projects — although improved equipment  efficiencies in projects completed  after 2015 are expected to mitigate these deduction impacts.

If you have any questions about how these changes to the law may impact you and your projects, please contact Concord at 888-897-5445 or via the following link today.

Projected Benefit Calculator

To generate a projected benefit of the Section 179D federal tax deduction for your project, please use the benefit projection tool found below:

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