Are there project certification requirements and if so, what are they?

Certain certifications are required to qualify for the section 179D deduction. It would be prudent to be aware of this information up-front so that it is available when needed. First, a “qualified individual” must provide a certification the property meets the requirements to be classified as energy efficient commercial building property. The certification need not be filed with the taxpayer’s tax return, but should be retained in the taxpayer’s records. The certification must include:

(1) The name, address and phone number of the qualified individual;

(2) The address of the building for which the certification applies;

(3) A statement that the energy efficient commercial building property for which the deduction is being claimed has been, or are planned to be, incorporated into the building to meet the applicable energy-saving target;

(4) A statement that the energy savings have been determined pursuant to certain prescribed calculation methodologies (described below);

(5) A statement that based on field inspections performed by the qualified individual after the property has been placed in service, the building has or will meet the energy-saving targets contained in design plans and specifications, and such inspections were performed pursuant to certain prescribed procedures (described below);

(6) A statement that the building owner has received a statement explaining the energy efficiency features of the building and its projected annual energy costs; (7) a statement that qualified computer software was used to calculate energy and power consumption and costs and identify the software used (discussed in detail below);

(8) A list identifying the components of the building’s three subsystems, the energy efficiency features of the building, and its projected annual energy costs; and

(9) A declaration signed by the qualified individual, under penalty of perjury, that to the best of his or her knowledge, the facts presented in support of the certification as true, correct and complete.

For this purpose, the Notice provides a broad and reasonable definition of who may be treated as “qualified individual.” Specifically, a “qualified individual” is an individual that is nor related to the taxpayer (in an employment context), is an engineer or contractor that is properly licensed as a professional engineer or contactor in the jurisdiction that the building is located and who represents in writing to the taxpayer that he or she has the proper qualifications to provide the required certifications and inspections.

 

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