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Energy Efficiency Tax Incentives Renewed Retroactively from 2018 through 2020

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On Friday, December 20th, President Trump signed and enacted a $1.4 trillion spending package that funds the government for the 2020 fiscal year, averting a second government shutdown for 2019. Included in the spending bills are numerous tax extenders, including many that had originally expired at the end of 2017. Among these tax breaks are various provisions for energy related tax credits and incentives.

Key energy tax provisions impacting the real estate industry include the following:

• §45L Energy Efficiency Tax Credits Extended for Multifamily & Residential Developers for 2018 through 2020 Low-rise apartment developers and homebuilders are eligible for a $2,000 tax credit for each new or rehabbed energy efficient dwelling unit that is first leased or sold by the end of 2020. Taxpayers also have the ability to amend returns to claim missed tax credits from previous years.

• §179D Energy Efficiency Tax Deductions Extended for Commercial Buildings for 2018 through 2020 Tax deductions of up to $1.80 per square foot for energy efficient commercial building property have been extended through the end of 2020. Designers of government-owned buildings remain eligible for these deductions as well.