Manufacturers & Distributors ARTICLE -
IRS Offers Green for Going Green
Target Audience: Manufacturing and Distributing Companies, Energy Tax Rebates Interest, Federal Energy Tax Credits Interest, Energy Efficient Tax Credits, Green Tax Credits, Energy Tax Credits Interest
The IRS will pay you for “going green,” if you can prove that improvements to your building or plant will result in additional energy efficiency. Under the terms of the Energy Policy Act of 2005, owners or leaseholders of commercial buildings can deduct the cost of any energy-efficient property they install in their buildings.
Specifically, businesses can deduct up to $1.80 per square foot of floor area if they achieve a 50% energy tax credit savings target and up to $0.60 per square foot for as little as 16% energy savings. These targets aren’t based on your current energy usage but on designated “reference” buildings that are comparable to yours but have been built according to current model building codes.
Learn more about energy efficient tax credits of 2009 by contacting our accounting firm here.
Thus, to qualify for the energy tax deduction, you must use no more than half the energy required for the reference building. You also must demonstrate that your improvements have achieved the anticipated savings by obtaining certification from a qualified expert and using software approved by the Department of Energy to calculate energy savings.
Qualifying improvements include interior lighting, heating, cooling, ventilation and hot water systems, along with building envelope systems (related to the roof, walls, foundation and other elements of the exterior envelope). Required reductions must be realized through energy and power usage for such systems.
Find out how our accountants can help your business learn more about green tax credits. Email us or call us at 1 (888) 875-9770.
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