The Bipartisan Budget Act of 2018, which Congress passed on February 9, 2018, contained a number of tax extenders, including a one-year retroactive extension of the Energy Efficient Commercial Building deduction. The retroactive extension of the Energy Efficient Commercial Building deduction makes all 2017 qualifying transactions now eligible for this previously expired deduction.
Commercial buildings that were constructed or renovated to include energy-efficient equipment, primarily lighting or HVAC systems, are now eligible for an accelerated tax deduction up to $1.80 per square foot under the extended Energy Policy Act of 2005. This deduction may also be available to the primary designers of government buildings subject to certain conditions.
With the higher tax rates that were in effect in 2017 prior to the passage of the Tax Cuts and Jobs Act, the retroactive extension of this deduction is even more valuable to taxpayers making these investments.