June 30, 2026 has come and gone, and with it, the headline that Section 179D is “over.” For architects, engineers, and design-build contractors who spent years incorporating energy efficient systems into public and nonprofit buildings, that headline can feel like a door closing. It isn’t quite that simple, and the difference matters if your firm has projects anywhere in the pipeline.
The Sunset Headline Only Tells Half the Story
Most coverage of the One Big Beautiful Bill Act (OBBBA) repeal stops at a single fact: projects that begin construction after June 30, 2026 no longer qualify for the 179D deduction. That part is accurate. What often gets left out is that the deadline is tied to when a project breaks ground, not when it wraps up or gets placed in service. A building that started construction in early 2026 can still be underway well into 2027 or 2028 and remain fully eligible.
That distinction is the reason the opportunity for designers does not disappear on a single date. It tapers off gradually, project by project, as each one works its way through construction and into service.
Three Dates, Three Different Jobs
It helps to stop thinking about 179D as having one deadline and start thinking about it as having three, each doing a different job.
Construction start date. This is the date OBBBA actually cares about. If a qualifying project broke ground on or before June 30, 2026, it remains eligible under the old rules regardless of how long construction takes.
Placed-in-service date. This is the year the deduction is actually claimed, or, for a missed deduction, the year the lookback study needs to point back to. A building can be placed in service in 2027, 2028, or later and still qualify, as long as construction started before the cutoff.
Tax return filing date. This is the date that starts the clock on the statute of limitations. For designers, that clock generally runs three years from when the original return was filed, and it is the deadline that ultimately decides whether a missed deduction can still be recovered.
Once you separate those three dates, it becomes clear why “the deduction is gone” and “the deduction is available for years” can both be true at the same time, just for different projects.
What “For Years” Actually Looks Like
Consider a public school project that broke ground in the spring of 2026 and, given a typical construction timeline, is placed in service in 2028. The tax return reporting that placed-in-service date might not be filed until 2029. From there, the three-year statute of limitations keeps that return open for amendment into 2032.
Stretch that same logic across a multi-building campus, a phased municipal project, or a design-build contractor with several government jobs at different stages, and the practical runway for claiming 179D extends well past the 2026 sunset most people have in mind. The opportunity is narrowing, not gone, and for firms with projects that broke ground before the deadline, it can realistically remain open for several more years.
Designers Follow a Different Recovery Path Than Building Owners
This is where it is worth being precise, because getting it wrong can cost a firm the deduction entirely. Building owners who directly hold the depreciable property can generally use Form 3115 to catch up missed depreciation, including cost segregation and, historically, 179D, as a change in accounting method.
That path is not available to designers. Because an architect, engineer, or contractor does not own the building, courts have held that an allocated 179D deduction is a one-time benefit rather than an ongoing method of accounting. For designers, the correct route to recover a missed deduction is a lookback study paired with an amended return, filed within the standard three-year statute of limitations, not a Form 3115 accounting method change. The sunset does not change this distinction. It only raises the stakes, since the statute of limitations is now the single factor standing between a firm and a deduction it already earned.
Where Firms Put This Window at Risk
A few patterns tend to close this opportunity faster than the law actually requires:
Assuming the deadline already applies to every project. Firms sometimes rule out 179D for anything not yet placed in service, without checking whether construction actually started before June 30, 2026.
Missing or incomplete allocation letters. Since the building owner must be a tax exempt entity that formally allocates the deduction to the designer, a missing or improperly executed allocation letter can undermine an otherwise qualifying claim.
Waiting until the statute of limitations is nearly closed. A lookback study takes time to complete properly, including energy modeling review and documentation of the original allocation. Starting the process with only weeks left in the three-year window leaves little room for anything to go wrong.
Applying the wrong retroactive mechanism. Treating a designer’s allocated deduction like a building owner’s Form 3115 catch-up is one of the more consequential mistakes a firm can make, since it does not hold up to the accounting method distinction courts have already ruled on.
What This Means for Firms Right Now
If your firm has projects that broke ground before June 30, 2026, whether already placed in service or still under construction, the smartest next step is simply finding out where each one stands. That means confirming construction start dates against the cutoff, locating allocation letters, and checking which prior tax returns are still within their three-year window before that window narrows any further.
CSSI has spent more than 23 years and over 65,000 completed studies helping building owners and the designers who work alongside them capture the tax incentives they have earned, backed by an engineering-based methodology built to hold up under IRS scrutiny. If you have projects that may still qualify, a no-cost analysis is the fastest way to know for certain rather than assuming the opportunity has already passed.
Frequently Asked Questions
Is Section 179D really over after June 30, 2026?
For new projects, yes: construction beginning after that date no longer qualifies. For projects that broke ground on or before June 30, 2026, eligibility is preserved even if the building is placed in service in a later year.
How many more years can designers actually claim 179D?
It depends on each project’s construction start and placed-in-service dates, plus the three-year statute of limitations on the resulting tax return. For projects with longer construction timelines, that can realistically extend the opportunity several years beyond 2026.
Can architects and engineers use Form 3115 to catch up a missed 179D deduction?
Generally, no. Courts have treated a designer’s allocated 179D deduction as a one-time benefit rather than an ongoing accounting method, which is why the recovery path for designers runs through a lookback study and an amended return rather than a Form 3115 change.
What do we need on hand to find out if we still qualify?
At minimum, the construction start date, the placed-in-service date, the original allocation letter from the building owner, and the filing date of the return that would need to be amended. From there, a lookback study can confirm whether the project meets the energy efficiency thresholds and whether the statute of limitations is still open.
