OU Advocated for Tax Credits Being Made Transferable
Today, the Orthodox Union (OU) — the nation’s largest Orthodox Jewish umbrella organization — applauded the U.S. Senate’s passage of legislation that will provide new financial support to nonprofit organizations, including synagogues and nonpublic schools, in making their buildings more energy efficient.
Passed by the Senate Sunday, the “Inflation Reduction Act of 2022” allows nonprofits to benefit from current energy-related tax credits by making them transferable to for-profit companies.
For more than 10 years, Internal Revenue Code section 179D has provided tax credits to building owners to subsidize the cost of making their buildings more energy efficient. For just as long, OU Advocacy has worked to make these federal tax credits available to nonprofits in some form.
The bill is a tremendous victory for nonprofits, allowing them to make energy efficiency improvements to their buildings and transfer the value of the credit to for-profit companies designing or installing the new energy systems. The company would then deduct the value from its invoice to the nonprofit.
For example, a school with a 100,000-square-foot building that retrofits its HVAC system and improves its energy efficiency by 25 percent would receive a credit worth 50 cents per square foot — or $50,000. The school would transfer this value to the designer/contractor installing the new HVAC system, who would in turn credit that value to the cost of the project.
This victory comes less than one year after another OU Advocacy success in the 2021 bipartisan infrastructure legislation. OU Advocacy successfully advocated for a new federal grant program to support the purchase of new energy systems by nonprofits.
Orthodox Union President Moishe Bane stated:
“The Orthodox Union is constantly working to deliver support for our community’s institutions. With energy and utility costs being so burdensome, helping our schools, synagogues and other Jewish institutions reduce their overhead costs and have more funds to devote to their core programs has been an ongoing goal of OU Advocacy.”
Nathan Diament, OU executive director for Public Policy, stated:
“We are very excited about the expansion of 179D tax credits to nonprofits. This resource, combined with other energy-efficiency programs, can potentially provide hundreds of thousands of dollars in support to individual schools, synagogues, and others. We thank Senate Majority Leader Chuck Schumer, Sens. Joe Manchin, Ron Wyden, and Ben Cardin for including this important tax credit provision in the reconciliation legislation. We urge the House of Representatives to pass the bill as soon as possible so President Biden may sign it.”