EPAct 2005 Claims

Before claiming the EPAct 2005 tax deduction, you must:
• Have the plans and actual in-place construction reviewed by qualified, third-party inspectors; and
• Have energy savings determined by software certified by the Department of Energy, except under Interim Rules for Lighting; and
• Obtain a certification, as determined by the IRS, that the required energy savings will be achieved.

The qualified, third-party inspectors:
• Are not related (do not have an employer/employee relationship) to the taxpayer claiming the deduction; and
• Are engineers or contractors who are properly licensed as professional engineers or contractors
in the jurisdiction in which the building is located; and
• Represent in writing to the taxpayer that they have the requisite qualifications to provide the certification required and/or to perform the inspection required.

There are two types of tax deductions you can claim:
• Whole Tax Deduction
– Interior lighting, HVAC/hot water and building envelope systems
– One-time deduction up to $1.80/sq. ft. if ASHRAE/IES Standard 90.1-2001 is exceeded by 50%
• Partial Tax Deduction
– Not all systems achieve 50% improvement over ASHRAE/IES Standard 90.1-2001
– It is possible to upgrade only portions of a building to higher efficiency lighting, with the deduction based on upgraded space square footage
– One-time deduction of $0.30 to $0.60/sq. ft. for lighting with 25-40% improvement
over ASHRAE/IES Standard 90.1-2001

The discussion of the Energy Policy Act of 2005 and related federal tax issues contained in this brochure is for general information only and is not tax advice. These tax rules are subject to change at any time, and any such change could be retroactive in effect. Your tax treatment may vary in light of your particular circumstances. Before pursuing or claiming any deduction described in this brochure, you should consult your tax advisor concerning your specific tax situation and potential changes in the applicable tax laws.