{"id":1829,"date":"2022-09-17T05:47:34","date_gmt":"2022-09-17T09:47:34","guid":{"rendered":"https:\/\/www.saudercpa.com\/blog\/?p=1829"},"modified":"2022-09-16T11:52:32","modified_gmt":"2022-09-16T15:52:32","slug":"2022-inflation-act-energy-efficient-commercial-buildings-deduction","status":"publish","type":"post","link":"https:\/\/www.saudercpa.com\/blog\/2022\/09\/17\/2022-inflation-act-energy-efficient-commercial-buildings-deduction\/","title":{"rendered":"2022 Inflation Act: Energy Efficient Commercial Buildings Deduction"},"content":{"rendered":"<p><em>Preface:\u00a0If you&#8217;re trying to create a company, it&#8217;s like baking a cake. You have to have all the ingredients in the right proportion. &#8211;Elon Musk<\/em><\/p>\n<p><strong>2022 Inflation Act: Energy Efficient Commercial Buildings Deduction<\/strong><\/p>\n<p class=\"cs30FCD7FE\"><span class=\"cs79DA67E2\">The Inflation Reduction Act of 2022 (2022 Inflation Act) modifies the energy efficient commercial buildings deduction for tax years beginning after December 31, 2022, by increasing the maximum deduction and updating the eligibility requirements for reduction of energy costs, in addition to other changes.<\/span><\/p>\n<p class=\"cs521885B6\"><span class=\"csDF4C6417\">Energy efficient commercial buildings deduction.\u00a0<\/span><span class=\"cs79DA67E2\">A deduction is allowed for all or part of the cost of energy efficient commercial building property placed in service as part of a building&#8217;s:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"csDEF910\"><span class=\"cs79DA67E2\">interior lighting systems;<\/span><\/li>\n<li class=\"csDEF910\"><span class=\"cs79DA67E2\">heating, cooling, ventilation, and hot water systems; or<\/span><\/li>\n<li class=\"csDEF910\"><span class=\"cs79DA67E2\">envelope.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p class=\"cs30FCD7FE\"><span class=\"cs79DA67E2\">The deduction was enacted to encourage commercial building owners or lessees to install energy efficient property. Installation of energy-efficient commercial building property occurs when constructing a new, or improving an existing, commercial building or government building. The tax deduction benefits both commercial building owners or lessees and designers of government-owned buildings.<\/span><\/p>\n<p class=\"cs30FCD7FE\"><span class=\"csDF4C6417\">Efficiency standard.<\/span><span class=\"cs79DA67E2\">\u00a0The 2022 Inflation Act updates eligibility requirements for the deduction so that property must reduce associated energy costs by 25% or more (decreased from 50% or more) in comparison to a reference building that meets the latest efficiency standard.<\/span><\/p>\n<p class=\"cs30FCD7FE\"><span class=\"csDF4C6417\">Applicable amount.<\/span><span class=\"cs79DA67E2\">\u00a0The applicable dollar value of the deduction is $0.50 per square foot, increased by $0.02 for each percentage point above 25% that a building\u2019s total annual energy cost savings are increased. The amount cannot be greater than $1.00 per square foot. However, the maximum amount of the deduction in any tax year cannot exceed $1 per square foot minus the total deductions taken in the previous three tax years (or during a four-year period in cases where the deduction is allowable for someone other than the taxpayer). The applicable dollar value will be adjusted for inflation for tax years beginning after 2022.<\/span><\/p>\n<p class=\"cs30FCD7FE\"><span class=\"cs79DA67E2\">An increased dollar value is available for projects that satisfy prevailing wage and apprenticeship requirements for the duration of the construction.<\/span><\/p>\n<p class=\"cs30FCD7FE\"><span class=\"csDF4C6417\">Alternative deduction for energy-efficient retrofit property.\u00a0<\/span><span class=\"cs79DA67E2\">Under the 2022 Inflation Act, taxpayers may elect to take an alternative deduction for a qualified retrofit of any qualified property. However, instead of a reduction in total annual energy power costs, the deduction is based on the reduction of energy usage intensity.<\/span><\/p>\n<p class=\"cs30FCD7FE\"><span class=\"cs3FB5185B\">Please contact us for information on how you may be able to take advantage of this deduction or any other tax relief under the 2022 Inflation Act.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preface:\u00a0If you&#8217;re trying to create a company, it&#8217;s like baking a cake. You have to have all the ingredients in the right proportion. &#8211;Elon Musk 2022 Inflation Act: Energy Efficient Commercial Buildings Deduction The Inflation Reduction Act of 2022 (2022 Inflation Act) modifies the energy efficient commercial buildings deduction for tax years beginning after December &hellip; <a href=\"https:\/\/www.saudercpa.com\/blog\/2022\/09\/17\/2022-inflation-act-energy-efficient-commercial-buildings-deduction\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;2022 Inflation Act: Energy Efficient Commercial Buildings Deduction&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1829"}],"collection":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/comments?post=1829"}],"version-history":[{"count":1,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1829\/revisions"}],"predecessor-version":[{"id":1830,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1829\/revisions\/1830"}],"wp:attachment":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/media?parent=1829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/categories?post=1829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/tags?post=1829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}