Tax Law Updates

TaxCentric Lighting is a tax-centric strategy to off-set the use of cash or your line of credit when upgrading to LED lighting systems.

Tax benefits continue to change based on the 2018 tax law changes.  Here is an overview of the  impact of tax deductions related to a capital investment to upgrade Lighting, HVAC or Building Envelope:

Tax Rates:  Are now 21% for corporations and are capped at 37% for individuals.  Recovery periods have not changed (39 year for non-residential and 27.5 year for residential).

Section 179 Expense:  Set at $1 Million.

EPAct 2005 (179D): (Energy Policy Act)   In late December 2019, EPAct was extended retroactive for 2018 and 2019, and forward for projects completed in 2020.

QLI:  (Qualified Leasehold Improvement)  Expired on December 31, 2017.

QIP: *  (Qualified Improvement Property)  Expanded to include for Section 179 purposes to include roofs, HVAC, fire protection and alarm/security systems.  It can also be expensed under Section 179 (see Section 179 Expense above).

Bonus Depreciation: * Bonus is allowed through 2026.  Bonus levels vary based on year of investment.

* The TCJA included a technical error which was corrected under the CARES Act, effective April 2020. Therefore, under the corrected TCJA, QIP can be applied to lighting and other assets, which means that, in most cases, an LED lighting upgrade will qualify for 100% bonus depreciation.

TaxCentric Lighting is here to help or assist you in qualifying for tax deductions that can be used to fund a lighting system, HVAC or other capital investments to upgrade your building and make it more efficient.