Energy Policy Act of 2005
The information contained in this document about The Energy Policy Act of 2005 is not offered as tax advice and should not be taken as such. Any information in this document or any other document referred to is meant for general informational purposes only. Please consult with your tax advisor to determine the specific tax treatment appropriate for your company.
Tax Deduction for Commercial Lighting Systems
The energy efficient commercial buildings deduction provides a deduction for building owners equal to energy-efficient commercial building property expenditures made by the taxpayer, subject to a cap.
How To Pursue The EPAct Tax Deduction Using The Interim Lighting Rule:
1. Design and install a compliant lighting system. The Full EPAct/Energy Estimator, found within the Energy & Economic Library, can be used to determine whether or not your lighting design (renovation or new construction) meets the EPAct LPD requirements and how much tax deduction is available. The latest version of the library can be downloaded with the link to the left.
2. Have a 'qualified' person certify the project. To be 'qualified' to certify compliance of an EPAct project, that person: (A) Is not related (within the meaning of §45(e)(4)) to the taxpayer claiming the deduction under § 179D (doesn’t work for the company claiming the deduction); (B) Is an engineer or contractor that is properly licensed as a professional engineer or contractor in the jurisdiction in which the building is located; and (3) Has represented in writing to the taxpayer that he or she has the requisite qualifications to provide the certification required under section 4 of this notice (in the case of an individual providing the certification) or to perform the inspection and testing described in section 4.05 of this notice (in the case of an individual performing the inspection). A blank certification form can be found in the library mentioned above.
3. Claim the deduction on the appropriate IRS form. Line 26 of IRS form 1120 should be used.
4. Attach compliance certificate and any other supporting documentation to the file copy of the tax return. A copy of the compliance certificate does not need to be submitted with the tax return.