Over the history of the United States Tax Code and all the programs offered to businesses throughout the years there is often a lot of confusion, and even myths, about the different programs. This is certainly true for the 179D tax credit although, as government tax programs go, this one has been surprisingly consistent.
The Misnomer
One of the most important issues to clarify with the 179D tax credit is that it is not truly a tax credit, but rather a tax deduction. The difference is in the way that the business is able to take advantage of the program.
In essence the 179D tax credit, as a deduction, allows a commercial property owner or leaseholder to claim against your business taxable income and reduce the overall taxes paid. If your taxable income for that year is not sufficient to cover the deduction earned through the program it can be applied past incomes or carried forward.
The 179D Only Applies To New Construction
Many business owners mistakenly believe that the 179D tax credit is only for immediate and new construction. In reality any business property that qualifies under the tax code regulations is eligible for the credit. In addition many properties that have been built since the ASHRAE 2001 standards were put in place will be able to receive full or partial deductions without the need for any additional changes or work on the three qualifying systems of the building envelope, lighting and the HVAC system.
However, to qualify the building must have been built or renovated between December 31st of 2005 and January 1st of 2014.
You Have Apply For the Entire Program
It is possible to have a building not qualify for all three areas of the program or to only receive what is known as partial credit in the lighting category. The total amount that you will be able to apply towards a deduction with the 179D tax credit is $1.80 per square foot if you meet the requirements in all categories.
The best way to determine if your building will qualify for the 179D tax credit is to work with company that can provide a free consultation. This will allow you to determine the benefits of the program to your specific situation. For more information read more.
