LED Lighting Retrofit Tax Breaks

Retrofit Your Commercial Lighting with LED for Big Tax Savings

At JLR Group our motto is “Saving Your Business Time and Money is our Top Priority!” In our last article, we discussed the discounts and rebates available for investing in energy-saving LED lighting retrofitting. But did you know that replacing your facility’s halogen, incandescent, or fluorescent lighting with LED lamps and fixtures may also qualify your company for substantial Federal tax savings?

LED retrofitting is an effective way to improve energy efficiency and reduce operational expenses while also enabling your business to benefit from significant tax incentives. JLR Group has helped dozens of businesses in Sanilac County, St. Clair County and across Southeast Michigan reduce their energy costs and lower their federal taxes with LED lighting retrofitting!

What is LED Lighting Retrofitting?

LED lighting retrofitting involves upgrading your existing lighting system to more energy-efficient LED technology. This process can include replacing outdated halogen, incandescent, or fluorescent bulbs and fixtures with LED equivalents or installing entirely new LED systems.

LED lights are known for their high energy efficiency, long lifespan, and superior light quality, making them a cost-effective and environmentally friendly choice. Because LED light bulbs use up to 90% less energy than incandescent light bulbs, the energy cost savings month after month and year after year can be quite significant for almost any commercial enterprise.

And the benefits of LED retrofitting extend beyond energy savings. LEDs have a much longer operational life compared to traditional lighting solutions – lasting up to 25 times longer – which reduces maintenance costs and the frequency of replacements. Additionally, LEDs provide better light quality, enhancing the visual comfort and productivity of occupants in commercial spaces.

What is a Tax Deduction & How Does it Work?

A tax deduction reduces the amount of income that is subject to taxation, thereby lowering your overall tax liability. When you invest in energy-efficient upgrades, such as LED lighting retrofits, you may be eligible for specific tax deductions like “IRS 179D” that can significantly offset the cost of your investment. These deductions are designed to encourage businesses to adopt energy-saving technologies, contributing to environmental sustainability.

To claim a tax deduction, businesses must meet certain criteria and follow the guidelines set by the IRS. The deduction amount is typically based on the cost of the energy-efficient upgrades and the resulting energy savings. By leveraging these tax benefits, businesses can reduce their taxable income and improve their financial performance.

IRS Tax Code 179D Tax Deduction

IRS Tax Code 179D – which is part of the Energy Policy Act of 2005 – created a tax deduction for energy efficient improvements to commercial buildings. This provides a valuable tax deduction for energy-efficient commercial building updates, including LED lighting retrofits. Under this tax provision, businesses can deduct a portion of the cost of installing energy-efficient lighting systems from their tax liability. The deduction is intended to incentivize energy-saving investments and promote the use of sustainable technologies.

LED lighting retrofits qualify for the IRS Tax Code 179D deduction because they significantly improve a building’s energy efficiency. Under IRS 179D a building may qualify for the federal tax deduction for as much as $0.60 per square foot for lighting upgrades to LED technology, IF it meets a minimum of 25% energy reduction (50% for warehouses).

JLR Group has helped dozens of businesses in Sanilac County, St. Clair County and across Southeast Michigan reduce their energy costs and lower their taxes with LED lighting retrofitting that qualifies for 179D tax deductions!

When you retrofit your commercial lighting with LED technology, the energy savings can be substantial, often meeting or exceeding the IRS requirements for 179D deductions. By documenting your specific energy savings (and following the proper procedures) your business can claim the 179D deduction, reducing the overall cost of your LED retrofit project. The savings from this tax deduction can make the transition to LED lighting extremely financially attractive.

Types of buildings that can qualify for 179D LED Lighting Tax Deduction:

• Retail buildings
• Office buildings
• Industrial buildings
• Warehouses
• Government-owned (city, state or federal) buildings including schools, airports, town halls, state colleges, etc.
• Apartment buildings (greater than 4 stories)

Commercial LED Lighting Retrofit | St. Clair County | Sanilac County | Southeast Michigan

JLR Group is committed to helping businesses in St. Clair and Sanilac County reduce their energy costs and maximize their tax savings through commercial LED lighting retrofits. By replacing outdated lighting systems with advanced LED technology, JLR Group can help your business qualify for significant tax deductions under IRS Tax Code 179D, lowering your initial investment costs.

Additionally, the ongoing energy savings from LED lighting will continue to benefit your bottom line for years to come. If you have a business in St. Clair County, Sanilac County, or Southeast Michigan contact JLR-Group today. We will offer you a FREE ESTIMATE on commercial LED lighting retrofitting, and help you learn how we can assist you in securing maximum tax deductions and achieving substantial energy savings.

LED Lighting Retrofit | St. Clair County | Sanilac County: 248.909.6183

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This content is provided for general information only and is not intended to be used for tax preparation purposes. Federal tax laws are subject to change & the information in this article may change over time. Visit the IRS website for the most recently updated tax rules and regulations. Always consult with your accountant when preparing taxes or when tax planning.