What better way to save some tax money than keeping the environment around your place of business clean? Each state offers their own particular incentives, like California with their credit AND grant programs for things like cleaner on and off-road vehicles and equipment.
Commercial Green Building
Section 179D was written to encourage builders to build new or improve commercial buildings with greener-type materials or systems. This tax credit has continuously been renewed after expiring each year, however, the last one expired December 2016 and has not been renewed as of yet. There is a bill very similar to the original that would extend it through 2018 called the Clean Energy for America Act.
- Interior lighting
- Heating/cooling and hot water
- Building envelope (the separator between conditioned and unconditioned areas of a building)
This deduction only covers particular types of buildings including:
- Garage structures
- Four story or larger multifamily residential buildings
Act 709 gives tax credit for a taxpayer producing specific energy efficient appliances manufactured after 2010:
- Clothes washers
The tax credit is dependent on the type of appliance, how energy efficient it is, and if it consumes water, how much.
The IRC 30D gives a tax credit for vehicles acquired after Dec. 31, 2009 ($2500)
- $417 for vehicles that draw propulsion energy from a batter with at least five KW hours capacity.
- $417 for each KW hour of battery capacity more that 5 KW hours.
- Credit does not exceed $7500.
This credit phases out as more of one manufacturer’s cars have been sold (up to 200K in the US). For example, if 100K cars have been sold, only half the credit can be claimed, and only 25% can be claimed after more than 100K have been sold.
Using Form 3468, you can claim investment credit for:
- Qualifying advanced coal project
- Qualifying gasification project
- Qualifying advanced energy project
Applying to both residential and commercial systems, with no cap on its value, this credit takes a nice 30% off the cost of your new solar energy system until 2019.
- 2020 it will cut down to 26% for commercial and residential
- 2021 it will be 22% for commercial and residential
- 2022 and beyond ONLY new commercial systems will be able to claim 10% off
Don’t forget each state has its own green incentives and credits which you can see on this interactive map for the state you live in.
If you’d like to save some time figuring out expiration dates and phase-out periods, increase the efficiency of your small business’ system and employ the help of a tax professional. Contact D&M Accounting today and we will see which tax credits you could be taking advantage of!