Energy Incentives · Guide · Working level
Energy incentives after OBBBA: what is dead, what survives, and what is still claimable
The One Big Beautiful Bill Act ended Section 179D for construction beginning after June 30, 2026 and Section 45L for homes acquired after that date. Projects already in flight still qualify, and prior-year claims remain open — via Form 3115 for owners and amended returns for designers and builders.
As of July 2026, the sunset dates written into the One Big Beautiful Bill Act have arrived: Section 179D is unavailable for property whose construction begins after June 30, 2026, and Section 45L is unavailable for homes acquired after that date. Neither incentive is retroactively repealed. Buildings whose construction began by the deadline still qualify whenever they are placed in service, homes acquired by the deadline still earn the credit, and unclaimed deductions for prior years remain reachable — through Form 3115 for owners and amended returns for designers and builders.
The key dates in one table
Everything in the post-OBBBA landscape turns on a handful of dates; the trigger event differs between the two provisions, and the difference matters.
| Provision | Trigger event | Cutoff | Still claimable if |
|---|---|---|---|
| Section 179D | Construction begins | After June 30, 2026: no deduction | Construction began on or before 6/30/2026, whenever placed in service |
| Section 45L | Home acquired (sold/leased as residence) | After June 30, 2026: no credit | Home acquired on or before 6/30/2026 |
| 179D look-back (owners) | Placed in service in a prior year | Ordinary method-change timing | Form 3115 catch-up on a current return |
| 179D prior years (designers) | Placed in service in a prior year | Statute of limitations | Amended return for an open year |
| 45L prior years (builders) | Acquired in a prior year | Statute of limitations | Amended return; general business credit carryforward 20 years |
OBBBA itself — H.R. 1 of the 119th Congress, enacted July 4, 2025 — is at congress.gov. The IRS pages for the 179D deduction and the 45L credit remain the operative guidance for what still qualifies.
What terminated, precisely
For 179D, the sunset attaches to beginning of construction, not placed-in-service. A hospital that broke ground in May 2026 and opens in 2028 can still claim the deduction for its 2028 tax year. A warehouse breaking ground in August 2026 cannot, ever. Beginning of construction is a fact question — site work, foundation, binding contracts — and taxpayers with projects near the line should have contemporaneous documentation: permits, notices to proceed, contractor daily logs. Expect this date to be the single most examined fact on late-vintage 179D claims.
For 45L, the trigger is acquisition: the date the home is sold, or first leased, for use as a residence. Completion and certification are irrelevant if the closing slipped past June 30. Builders holding certified but unsold inventory as of July 2026 hold homes with no credit attached. There is no relief for a contract signed in June that closed in July.
Both provisions retain their IRA-era structure for everything that still qualifies, including the prevailing wage and apprenticeship multipliers that quintuple the base amounts.
What survives: projects in flight
A meaningful pipeline of 179D property remains. Any commercial or tall-residential project that commenced construction by June 30, 2026 carries its eligibility to completion. For these projects, the claiming process is unchanged — modeling, inspection, certification, allocation for designers, Form 7205 — and is walked through in our start-to-finish claim guide. The only new element is the construction-start file. Treat it as part of the certification package.
Designers of government and tax-exempt buildings are similarly unaffected for qualifying projects: allocations remain available for buildings whose construction began in time, and the allocation mechanics described in our designer allocation guide apply without modification.
For 45L, "in flight" ended at the closing table on June 30, 2026. The surviving work is entirely backward-looking.
Claims still open for prior years
The sunset changed nothing about prior years, and this is where most remaining value sits.
Building owners: the Form 3115 look-back
An owner who placed energy-efficient property in service in, say, 2021 or 2023 and never claimed 179D has been depreciating basis it could have deducted. Because the missed deduction is an impermissible-to-permissible depreciation issue on property held for more than one year, the fix is generally an automatic accounting method change on Form 3115, with a Section 481(a) catch-up adjustment deducted in the year of change — no amended returns, and reach into years otherwise closed by the statute of limitations. The owner must still assemble the full study for the original year: modeling against the then-applicable ASHRAE baseline, certification, and (for post-2022 property claiming the increased rate) wage records.
Designers: amended returns only
An allocated designer has no asset and no method; the deduction belongs to the placed-in-service year, and the only route back is an amended return for an open year. With a three-year limitations period, a designer amending in mid-2026 can typically reach returns filed for 2022 forward. The allocation letter must be obtained before the amended return is filed, and letters get harder to obtain as building staff turn over — a genuine, non-manufactured reason not to let old allocations linger.
Builders: amended 45L claims
Eligible contractors can amend open years to claim missed 45L credits on homes acquired 2022 through June 30, 2026, and unused credits carry forward twenty years as general business credits under Section 39. The substantiation burden — rater certification files, closing dates, multifamily wage records — is described in our 45L brief.
Illustrative reach-back in years from 2026. Form 3115 catch-up reaches all prior open-method years for owners; amended returns are bounded by the roughly 3-year limitations period.
On promoters selling urgency
The sunset produced a marketing wave: countdown clocks, "last chance" webinars, fee quotes contingent on signing this week. Most of it misunderstands — or misstates — the law. There is nothing to race for. The construction-start and acquisition dates have passed; no engagement letter signed in July 2026 changes whether a project qualified in June. For prior-year claims, the deadlines are the ordinary ones: limitations periods for amended returns and method-change timing for Form 3115, both measured in years, not days.
Legitimate urgency exists in exactly two places. First, allocation letters: tax-exempt signatories retire, and institutional memory of who designed what decays, so designers with unclaimed allocations should pursue letters promptly. Second, limitations periods roll: a designer's 2022 amended-return window closes on the ordinary schedule. Neither justifies a rushed study. A 179D claim is only as good as its model, inspection, and certification, and a provider who compresses those to meet an artificial deadline is manufacturing exam risk, not value. The neutral test is simple: would this claim, in this amount, be filed the same way with no deadline at all? If not, the deadline is doing work the facts cannot.
What this corner of practice looks like now
Energy-incentive work has become closeout work. For owners: sweep fixed-asset records for 2021–2026 placed-in-service dates and run the Form 3115 analysis. For designers: inventory government and tax-exempt projects, secure letters, and amend open years. For builders: reconcile certification files against closing dates through June 30, 2026. For projects that broke ground in time: paper the construction-start date now, while the evidence is fresh. And for anything breaking ground after June 30, 2026: there is no federal 179D or 45L analysis to do — which is itself an answer worth giving clients plainly.
Frequently asked questions
- Did OBBBA eliminate the 179D deduction and the 45L credit?
- Yes, prospectively. Under the One Big Beautiful Bill Act, enacted July 4, 2025, Section 179D does not apply to property whose construction begins after June 30, 2026, and Section 45L does not apply to homes acquired after June 30, 2026. Both incentives remain fully claimable for projects and homes that satisfy those dates, including on prior-year returns still open.
- Can I still claim 179D for a building completed years ago?
- Often, yes. A building owner who never claimed Section 179D for energy-efficient property placed in service in a prior year can generally claim the missed deduction through an automatic accounting method change on Form 3115, taking a catch-up adjustment in the current year without amending. An allocated designer, who has no depreciable asset, must instead amend the return for the placed-in-service year if it remains open.
- My building starts construction in August 2026 — is any deduction available?
- No. Section 179D terminates for property whose construction begins after June 30, 2026, regardless of when the building is placed in service. Physical work beginning after that date does not qualify. If construction genuinely began on or before June 30, 2026 — a fact question documented by permits, contracts, and site work — the property can still qualify even if completed later.
- What happens to a certified home that sells after June 30, 2026?
- No Section 45L credit. The statute keys on acquisition — the date the home is sold or leased for use as a residence — not certification or completion. A fully certified ENERGY STAR or Zero Energy Ready home that closes on or after July 1, 2026 generates no credit for the builder, even if construction and certification were finished well before the deadline.
- Should I hire a firm urging me to act before 179D 'expires'?
- Be skeptical of urgency framing. For past placed-in-service years, there is no expiring deadline beyond the ordinary statute of limitations and the Form 3115 timing rules; the sunset dates already happened and cannot be beaten by signing an engagement letter quickly. Evaluate providers on modeling quality, inspection practice, and certification credentials, not countdown clocks.