Section 179D  /  The Sunset
Section 179D

The 179D sunset:
what still qualifies.

The 2025 law set an end date for 179D, but it didn’t erase the deduction. Understanding exactly what the cutoff does, and doesn’t, touch is the difference between missing the deduction and still capturing it.

Check What You Can Still Claim
What Changed

Terminated for new construction after June 30, 2026.

Under the One Big Beautiful Bill Act, Section 179D is terminated for projects that begin construction after June 30, 2026. The trigger is when construction begins, not when the building is placed in service. That distinction is everything: a project that broke ground on or before the cutoff can still qualify, even if it’s completed and placed in service months or years later.

Still On the Table

Three ways the deduction is still available.

Projects already underway

  • Construction that began on or before June 30, 2026
  • Eligible even if placed in service later
  • Claimed in the year the building is placed in service

Designer allocations on those projects

  • Government and tax-exempt buildings that started in time
  • Architects and engineers can still receive the allocation
  • Often the most overlooked remaining opportunity
Prior years. Separate from the sunset, buildings placed in service in earlier open years may still be claimed, owners through the applicable look-back procedures, designers by amending open returns. The sunset limits future projects; it doesn’t reach back and undo work you already did.
Why Timing Matters

The clock is on identifying, not just building.

Because eligibility turns on a construction-start date that has already passed, there’s no more starting new qualifying projects. What remains is a finite pool: the projects that began in time, and the prior-year buildings that were never claimed. The value now is in finding and documenting them before the placed-in-service years and amendment windows close. That’s a limited, and shrinking, opportunity, which is exactly why it’s worth reviewing now.

Common Questions

The sunset, plainly.

My building isn’t finished yet. Did I miss it?

Not necessarily. If construction began on or before June 30, 2026, the project can still qualify when it’s placed in service. It’s the start date that controls, not completion.

How is ‘begin construction’ determined?

Generally by a physical-work test or a cost safe harbor, similar to other energy provisions. Documenting the start date is part of substantiating the claim, and something we review up front.

Can I still claim 179D on a building from a few years ago?

Often, yes. Prior-year projects are separate from the sunset and may be captured through the applicable look-back or amendment procedures, subject to the relevant limits.

Should I wait to see if it’s extended?

We wouldn’t plan on it. The safer approach is to capture what already qualifies now, while the placed-in-service and amendment windows are open.

Find out what still qualifies for you.

Check What You Can Still Claim

This page is general information, not tax or legal advice. Section 179D eligibility, amounts, certification, and deadlines depend on the project’s facts and current law, and are determined through the required energy study and certification in coordination with your tax advisor. Novaric does not guarantee deduction amounts or any tax outcome.