What Is The EPAct Tax Credit? (Energy Policy Act of 2005)

Posted by Jimmy Hovey on Wed, Apr 04, 2012 @ 08:04 AM

Total EPAct Deduction $1.80 Per Square Footvideo-epact-tax-credit-2005-energy-efficient-lighting-upgrades

This original bill was passed in 2005, and it was renewed in 2008 by President Obama. And this currently goes through the end of 2013, so we have about a year and a half left. It allows $1.80 square foot tax deduction for areas that qualify. That’s divided into three areas:

1. Electrical or lighting.

2. HVAC

3. The building envelope, such as insulation, window.

EPAct Divided Into 3 Distinct Areas

Divide $1.80 by three and you’ve got $0.60 per square foot in each of those areas. This bill was originally passed to give business owners the incentive to make energy efficiency investments into their facilities.

Your Facility MUST Qualify

The key is that your facility needs to qualify. For lighting that means that the area has be 50% below the ASHRAE standard for acceptable watts per square foot. ASHRAE is the standard for energy efficiency metrics.

You May Qualify For A Partial Tax Deduction

There is a sliding scale if your facility almost qualifies, so there is some flexibility. But in order to qualify for the deduction, the project must be certified by a licensed professional, such as an electrical contractor like us, or a lighting design professional, which we also count as a lighting design professional.

Lots Of Paperwork

There’s very specific paperwork requirements that have to be met and you cannot go backward to get the deduction. So if you made an improvement in your facility last year, and now you're just learning about this, it’s not going to do you any good at this point. It has to be in the year that the improvement was actually made.

Confirm The Benefits With Your Tax Professional

To really know how this impacts you, your best bet is to check with your accountant, or tax attorney, and you actually may have to do some self-eduction, because there doesn’t seem to be a lot of knowledge out there about how the Energy and Policy Act actually works.

Learn More About The Benefits Of Energy Efficiency

Free eBook with loads of information about energy efficient lighting technology and why you should consider energy efficient upgrades for your facility.  Just click on the book below to get your copy.....

business-owners-guide-to-energy-efficiency

Other Related EPAct Article:

The Energy Policy Act of 2005: Tax Deduction vs. Tax Credit

Topics: epact tax deduction, epact lighting, epact tax credit, epact michigan, epact tennessee, epact 2005 lighting, epact kentucky, epact, energy policy act