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Section 179D Commercial Building Efficiency Deduction
Grantya researchSee programDeadline: Lookback (2006–2024): permanent | New construction BOC: 2026-06-30
TWO TRACKS — (1) NEW PROJECTS: URGENT — TERMINATES JUNE 30, 2026 under OBBBA for property the construction of which begins after that date. 2026 deduction values (IRS Rev. Proc. 2025-32): $0.59–$1.19/sq ft base; $2.97–$5.94/sq ft with prevailing wage + apprenticeship. Eligible improvements: lighting, HVAC, building envelope achieving ≥25% energy savings vs. ASHRAE 90.1 reference. (2) LOOKBACK — UNAFFECTED BY OBBBA: Projects completed 2006–2024 may have unclaimed deductions recoverable through a catch-up study (Form 7205). The lookback opportunity is the highest near-term value driver — most building owners do not realize they can still claim it. Designers (architects, engineers) of government/nonprofit buildings can claim via allocation letter.
Program details
- Full Name
- Section 179D Energy Efficient Commercial Buildings Deduction
- Type
- federal
- Client Type
- commercial
- Project Types
- led, hvac, solar, general, lighting, efficiency
- Eligibility
- NEW PROJECTS: construction must BEGIN before July 1, 2026 to qualify | LOOKBACK: 2006–2024 already-completed projects remain claimable (no OBBBA impact) | Commercial building owners or lessees | Building must achieve ≥25% energy reduction vs. ASHRAE 90.1 reference | Full deduction ($5.94/sqft) requires prevailing wage + apprenticeship compliance | Eligible improvements: interior lighting, HVAC/hot water, building envelope (insulation, windows, roofing) | Designers of government-owned and tax-exempt buildings can claim via allocation letter from building owner
- Status
- open
- Deadline
- Lookback (2006–2024): permanent | New construction BOC: 2026-06-30
- Application URL
- https://www.irs.gov/forms-pubs/about-form-7205
- Stackable With
- federal_itc_solar, section_48e, comed_smart_ideas_commercial, comed_hvac_rebates, comed_lighting, il_cpace, nicor_gas_commercial
- Notes
- TWO-TRACK STATUS — (1) LOOKBACK 2006–2024: permanent, unaffected by OBBBA, highest near-term value capture, IRS Form 7205. (2) NEW CONSTRUCTION: OBBBA terminated 179D for property the construction of which BEGINS after Jun 30, 2026. Lead with the lookback opportunity in client conversations.
Source: Grantya research. Always confirm current terms on the official program page.