Federal Brownfields Income Tax DeductionUpdate: This deduction has been extended through December 31, 2011 as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR 4853).
Basics of the Federal Brownfields Tax DeductionBusinesses that own and cleanup contaminated properties may be eligible to take advantage of a federal income tax deduction for expenses incurred by December 31, 2011. The Federal Brownfields Tax Deduction allows a taxpayer to deduct qualified environmental remediation expenditures at a property held for use in a trade or business or for the production of income. The taxpayer takes the deductions from federal income in the year that the expenditures were paid or incurred, rather than depreciating them over several years. How to QualifyFor detailed information, please refer to the EPA's Brownfields Tax Incentive web page [exit DNR]. What's deductible?Remediation expenditures include site assessment, investigation and monitoring; remediation activities; operation and maintenance costs; voluntary cleanup program fees; and costs for removal of demolition debris. The 2006 federal Tax Relief and Health Care act applied these deductions to remediation expenses associated with federally defined petroleum products – including crude oil, crude oil condensates, and natural gasoline – incurred from December 31, 2006 to December 31, 2011. The law also applies the federal income tax deduction to eligible expenses incurred after 1998 that are associated with the abatement or control of hazardous substances, as defined under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Additional Qualifications
Process for Getting DNR CertificationDNR must provide a statement that the property is a "qualified contaminated site". To get the certification, complete the Brownfields Federal Tax Deduction Pre-Certification Form (Form 4400-206) [PDF]. Include all necessary information, and send the form and materials to the DNR's Melissa Enoch:
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For more information on this subject, contact: Melissa Enoch Last Revised: Tuesday March 29 2011
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