What is the 179D tax deduction, and how does it work?

The 179D tax deduction is a federal incentive designed to encourage energy-efficient building design and construction. It allows property owners or designers of government buildings to deduct up to $5 per square foot for implementing qualifying energy-saving measures in lighting, HVAC systems, or building envelope improvements. To claim the deduction, buildings must meet specific energy efficiency standards verified through independent certification. This incentive helps reduce tax liability while promoting sustainable and environmentally friendly construction practices.