Is 179D Coming Back? Pending Bills and the Proposed BEAR Credit

title: "Is 179D Coming Back? Pending Bills and the Proposed BEAR Credit" description: "Where the 179D deduction stands, which bills in Congress would restore it, and how the proposed BEAR tax credit compares to 179D and 45L." date: 2026-10-27 author: Taylor Beamer category: 179D slug: 179d-legislation-bear-tax-credit

Not yet. Under current law, the 179D energy efficient commercial buildings deduction does not apply to property whose construction begins after June 30, 2026. Two House bills, H.R. 8477 and H.R. 5862, would restore 179D with no expiration date and apply the fix retroactively, so projects that started after that date would qualify too. Neither has moved past committee as of October 27, 2026. Separately, the U.S. Green Building Council has proposed a new Building Energy Affordability and Resilience (BEAR) tax credit for building retrofits, but it has not been introduced as a bill.

Key takeaways

• 179D is still available for property whose construction began on or before June 30, 2026, whenever it is placed in service.
• H.R. 8477 (Republican-sponsored) and H.R. 5862 (Democratic-sponsored) use identical language to restore 179D retroactively. Both are in the House Ways and Means Committee.
• The 119th Congress ends January 3, 2027. Bills not enacted by then must be reintroduced.
• The proposed BEAR credit would pay 15 to 35 percent of qualified investment, but only for existing buildings. It would not cover new construction or new homes.
• Record the construction start date of every project now, including those that started after June 30, 2026.

Is 179D still available in 2026?

Yes, for projects whose construction began on or before June 30, 2026. The deadline is a construction start test, not a completion test. A school renovation that began in May 2026 and finishes in 2028 can still qualify, and the deduction is claimed for the year the property is placed in service. Completed buildings in open tax years can often be claimed on an amended return.

For taxable years beginning in 2026, the maximum 179D deduction is $0.59 to $1.19 per square foot, or $2.97 to $5.94 per square foot when prevailing wage and apprenticeship requirements are met. A building must show at least 25 percent energy cost savings compared with an ASHRAE 90.1 reference building. See the IRS 179D page for current rules.

Projects placed in service in 2027 or later are generally measured against a stricter reference building. See how ASHRAE 90.1-2019 changes 179D in 2027.

What did the One Big Beautiful Bill Act change about 179D?

Before July 2025, 179D was permanent. The One Big Beautiful Bill Act (Public Law 119-21) added a new subsection, 179D(i), stating that the section does not apply to property whose construction begins after June 30, 2026. The House-passed version of that bill left 179D alone. The termination came from the Senate.

The same law ended the 45L new energy efficient home credit for homes acquired after June 30, 2026, and the 25C home improvement credit after 2025.

Which bills in Congress would restore 179D?

Two House bills would restore 179D directly, and a third would do it as part of a broader package. As of October 27, 2026, all are in committee.

H.R. 8477 was developed with North America's Building Trades Unions. Besides 179D and 45L, it extends deadlines for the 45V clean hydrogen credit and the 45Y and 48E clean electricity credits. Two of its cosponsors, Reps. Miller and Carey, sit on the Ways and Means Committee.

H.R. 5862 restores a wider set of credits that the One Big Beautiful Bill Act cut, including 25C, 25D, the clean vehicle credits, and the 45Y and 48E wind and solar credits.

H.R. 7977 is a broad energy package. Its tax section repeals the One Big Beautiful Bill Act's energy credit terminations in one step, which includes 179D and 45L.

S. 3722 covers residential credits only: 45L, 25C, and 25D. It does not include 179D.

The 179D language in H.R. 8477 and H.R. 5862 is identical, word for word. That makes 179D one of the few energy tax provisions with restoration bills filed by both parties.

What would restoring 179D mean for projects that started after June 30, 2026?

They would qualify. Both H.R. 8477 and H.R. 5862 strike subsection 179D(i) and make the change effective as if it had been included in the One Big Beautiful Bill Act from the start. In practice, the June 30, 2026 cutoff would disappear and 179D would work as it did before, with no gap for projects that began in between.

That is why construction start dates and design records matter now, even for projects that do not qualify under current law.

What happens if Congress does not act this year?

The 119th Congress ends on January 3, 2027. Any bill not enacted by then expires and would need to be reintroduced in the 120th Congress. Tax provisions have largely been left out of this year's budget reconciliation bills, and none of the 179D bills has had a committee vote. Our tax law updates page tracks changes as they happen.

What is the proposed BEAR tax credit?

The Building Energy Affordability and Resilience (BEAR) tax credit is a U.S. Green Building Council proposal. It would replace the role 179D played for retrofits with a credit for energy efficiency investments in existing buildings such as offices, schools, hospitals, and apartment buildings. As of October 27, 2026, it exists as a concept paper, and we have not found a bill that would create it.

Four types of property would qualify:

• HVAC systems, including water heating
• Building envelope, including air sealing, insulation, doors, windows, and glass
• Lighting systems
• Energy management systems that reduce and manage energy demand

Public and nonprofit owners could receive the credit through direct pay. For-profit owners could sell it through transferability.

How would the BEAR credit be calculated?

The rate depends on the drop in the building's energy use intensity (EUI), its energy use per square foot, compared with its own pre-retrofit baseline. EUI can be modeled before construction or measured before and after.

There is a jump at 20 percent: a project at 19 percent EUI reduction earns 15 percent, and a project at 20 percent earns 20 percent. The maximum is 35 percent with the grid bonus.

How does BEAR compare to 179D and 45L?

See the IRS pages on 179D and 45L for current law.

What are the biggest differences between BEAR and 179D?

A credit is worth more than a deduction. A $100,000 deduction saves a C corporation $21,000 at the 21 percent federal rate. A $100,000 credit saves $100,000. 179D also reduces the building's depreciable basis by the amount deducted. USGBC's own example, a 100,000 square foot office renovation with $5 million of qualified efficiency work, puts BEAR at $750,000 to $1.75 million against a 179D benefit of about $62,000 to $125,000.

New construction is left out. BEAR covers renovations of existing buildings only. New commercial buildings and new homes would still depend on restoring 179D and 45L.

The baseline is the building itself. 179D compares a building with a code-minimum reference building. BEAR compares a building with its own past energy use, which is a lower bar for older, inefficient buildings. It works more like the existing 179D(f) alternative retrofit deduction, which also uses the building's own EUI.

Designers of public buildings lose the allocation. Under 179D, a government or nonprofit owner can allocate the deduction to the architect or engineer who designed the qualifying systems. BEAR would pay the owner directly instead.

Open questions remain. The concept paper does not say whether EUI is measured at the site or the source, how measured results are adjusted for weather and occupancy, whether prevailing wage and apprenticeship rules apply, how the credit affects basis, who claims it in a leased building, or whether BEAR would sit alongside a restored 179D or replace it.

What should owners and designers do now?

1. Claim what is available under current law. Projects whose construction began on or before June 30, 2026 do not depend on any new legislation. A favorable bill later will not fix a missed amendment window or a missing allocation letter.
2. Record the construction start date for every project, including those that started after June 30, 2026. Both restoration bills are retroactive. If one passes, those projects could qualify, and the start date and design records will decide it.
3. Keep utility and energy data for existing buildings. BEAR and the current 179D(f) retrofit deduction both measure savings against a building's own energy history. Twelve months or more of utility data, tracked in a tool such as ENERGY STAR Portfolio Manager, is the starting point.
4. Designers of public buildings should pursue allocations now. Under current law, the designer allocation is available for qualifying government and nonprofit projects. A BEAR-style credit would send that value to the owner instead.

If you have projects underway or recently completed, a 179D study under current law may be worth more than you expect. Our 179D energy deduction overview explains how a study works, and our 179D Deduction Calculator estimates the deduction for each building.

Frequently asked questions

Is 179D coming back?

Possibly. H.R. 8477 and H.R. 5862 would each restore 179D with no expiration date, retroactive to the June 30, 2026 cutoff. As of October 27, 2026, both are in the House Ways and Means Committee and neither has had a vote.

What is the 179D deadline?

Construction of the energy efficient property must begin on or before June 30, 2026. The property can be placed in service later, and the deduction is claimed for the year it is placed in service.

Can a project that started construction after June 30, 2026 claim 179D?

Not under current law. If H.R. 8477 or H.R. 5862 becomes law, those projects could qualify. Keep records of the construction start date in case that happens.

Is 45L being extended?

Four bills would extend 45L through 2032: H.R. 8477, H.R. 5862, H.R. 7977, and S. 3722. Under current law, 45L ended for homes acquired after June 30, 2026.

Is the BEAR Act a law?

No. BEAR is a proposal from the U.S. Green Building Council. As of October 27, 2026, we have not found a bill in Congress that would create it.

Would the BEAR credit replace 179D?

USGBC presents it as a way to fill the gap left by the end of 179D. BEAR would cover only retrofits of existing buildings, so new construction would still depend on restoring 179D. No bill text yet says whether the two would exist side by side.

Would architects and engineers still benefit under BEAR?

Not through an allocation. Public and nonprofit owners would receive the BEAR credit directly through direct pay. Under current 179D rules, those owners can allocate the deduction to the designer.