179D Deduction Remains Available for Existing Buildings
News related to:David Wiener, known as Mr. Cash Flow · 2 min read
David Wiener, the host of The Tax Strategy Playbook podcast, announced that the 179D Deduction, a federal tax deduction for energy-efficient commercial buildings, remains available for buildings already in service after the June 30 cutoff. The cutoff was established by the One Big Beautiful Bill Act (Public Law 119-21), which closed the deduction for any project that had not yet begun construction as of June 30, 2026.
This announcement clarifies that the deduction is still applicable to buildings that were already in service and projects that had already begun construction prior to the June 30 deadline.
According to Wiener, the law's closure on projects that had not yet started construction does not affect buildings that are already standing. This means that owners of buildings that were already in service and architects and engineers who designed public buildings can still claim the 179D Deduction.
The IRS instructions set the deduction at $0.59 to $1.19 per square foot, depending on energy savings, and up to $5.94 per square foot for projects that meet prevailing wage and apprenticeship requirements. For a 100,000 square foot building, this range translates to $59,000 to $119,000 at the base rates and up to $594,000 at the top rate. Earlier years carry their own rates, which topped out at $1.80 per square foot for tax years beginning before 2021.
The release identifies three groups that can still claim the deduction: owners of buildings already in service, developers with projects underway, and architects, engineers, and other designers of public buildings. Owners of buildings that installed qualifying energy-efficient improvements in any year since 2006 and never claimed the 179D Deduction can claim the missed deduction on a current return. Developers with projects that started in May 2026 and open in 2028 can still qualify, provided the date that counts is the day construction began. Designers of public buildings can allocate the deduction in writing to the person primarily responsible for designing the energy-efficient property, provided the owner is a government or a tribal government or a tax-exempt organization.
The episode is available at www.taxstrategyplaybook.com/179d-deduction.
This article is part of the business-finance desk, as it deals with tax strategy for real estate investors, business owners, and tax professionals.