What these incentives are
Employers investing in energy-efficient buildings or EV charging infrastructure may have a limited window to take advantage of two federal incentives before they expire on June 30, 2026.
Section 179D is a federal tax deduction that supports energy efficiency improvements in commercial buildings, including lighting, HVAC systems, and building envelope upgrades. Section 30C is a federal tax credit that helps offset the cost of installing EV charging stations and other alternative fuel infrastructure at commercial locations.
For organizations planning facility upgrades, workplace charging stations, or fleet electrification projects, these incentives can help reduce project costs. However, both are scheduled to sunset at the end of June, making project timing an immediate consideration.
What this means in practice
For many employers, the key question is whether a project can meet the required milestones before the deadline.
For Section 179D, a project generally must either have substantial construction activity underway or meet a minimum cost-incurred threshold (at least 5% of total project costs incurred) before June 30. Planning activities, design work, permitting, and procurement alone may not be enough to preserve eligibility.
For Section 30C, the requirement is more straightforward. Charging equipment must be installed, operational, and ready for use before July 1. Equipment that has been ordered, delivered, or partially installed may not qualify if it is not fully in service by the deadline.
This is not only a tax consideration. Facilities teams, project managers, operations leaders, and finance stakeholders should understand where projects stand today and whether any actions are needed to meet qualifying requirements before the incentives expire.
Common misconceptions
One common misconception is that starting a project automatically preserves eligibility. In practice, employers must satisfy specific qualification requirements before the deadline. Signing a contract, approving a budget, or ordering equipment does not necessarily mean a project qualifies.
Another misconception is that incentives apply automatically. Documentation is required to support a claim, and some projects may require additional certifications or supporting records. Employers should understand documentation expectations before a project reaches completion.
What employers should watch
June 30 is a firm deadline. Employers with active building improvement projects should evaluate whether construction has begun or whether project spending has reached the required threshold. Those with EV charging projects should confirm whether equipment can be fully installed and operational before July 1.
Documentation is equally important. Construction records, invoices, project milestones, commissioning reports, and other supporting materials may be needed to substantiate eligibility. Establishing a clear documentation process now can help avoid challenges later.
Organizations with projects already underway may also benefit from involving finance teams and tax advisors early. While tax reporting occurs later, decisions made in the coming weeks may determine whether a project remains eligible for the incentive.
Closing takeaway
Section 179D and Section 30C have helped employers invest in energy efficiency, facility improvements, and transportation infrastructure while offsetting a portion of project costs. With both incentives approaching expiration, timing has become a critical factor.
Employers with projects in progress should review current timelines, confirm whether qualifying milestones can be achieved before the deadline, and ensure supporting documentation is being captured. Taking these steps now can help organizations make informed decisions while the incentives remain available.
