Form 7205, Energy Efficient Commercial Buildings Deduction
Form 7205 is how building owners and designers claim the section 179D deduction for energy efficient commercial building property placed in service during the year. Fill in the official IRS PDF below and download it.
This is the genuine IRS PDF, unmodified. Source: IRS official page.
What is 7205?
Section 179D rewards energy-saving investments in commercial buildings: interior lighting, HVAC and hot water systems, and the building envelope that meet the required energy savings standards. Form 7205 computes the deduction per building, based on the qualifying square footage and the applicable per-square-foot rate, which can be higher when prevailing wage and apprenticeship requirements are met.
The form asks whether you are the building owner or the designer of a building owned by a specified tax-exempt entity or government, since those owners can allocate the deduction to the architect, engineer, or contractor who designed the property. It also captures the certification details from the qualified individual who verified the energy savings.
Who files 7205?
- Owners of commercial buildings who installed qualifying energy efficient property
- Architects, engineers, and design-build contractors receiving a 179D allocation from a government or tax-exempt building owner
- Businesses upgrading lighting, HVAC, or building envelope systems in property they own
- Partnerships and S corporations claiming the deduction and passing it through to owners
How to fill out 7205
- Identify each building for which you are claiming the deduction, with its address and the date the property was placed in service.
- Indicate whether you are the building owner or a designer with an allocation, and attach or record the allocation details if you are the designer.
- Enter the energy savings percentage or applicable qualification method and the building’s square footage to figure the per-building deduction.
- Record the certification information from the qualified individual who certified the energy savings.
- Total the deduction, download the completed PDF, and attach it to your income tax return for the year the property was placed in service.
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Frequently asked questions
Who can claim the 179D deduction for a government building?
Government and certain tax-exempt building owners cannot use the deduction themselves, so they may allocate it to the person primarily responsible for the design, typically an architect, engineer, or contractor. The designer then claims it on Form 7205 with the allocation documented.
Is a certification required?
Yes. A qualified individual, generally a licensed engineer or contractor using approved software, must certify the energy savings before the deduction is claimed. Form 7205 asks for that certifier’s information.
How large is the deduction?
It is computed per square foot of the qualifying building, with the rate depending on the energy savings achieved and on whether prevailing wage and apprenticeship requirements were satisfied. Check the current instructions at irs.gov for the applicable rates.