MAXIMIZE the 179D Tax Deduction

Energy-Efficient Tax Savings for Commercial Buildings in Illinois

TaxTaker works for commercial building owners and designers in Illinois to save money through energy-efficient improvements.

About 179D Program

Section 179D offers lucrative tax deductions for businesses investing in energy-efficient improvements in commercial buildings in Illinois. Whether you're renovating your existing structure or constructing a new one, there's a potential to claim up $5+ per square foot. And with TaxTaker by your side, every step is simplified.

What Type of Buildings Qualify?

Commercial
Multi-Family
Industrial, Office
Parking Garages
Schools
Churches
Hospitals
Big Box Retail
Hotels

HOW THE 179D TAX DEDUCTION HELPS YOU SAVE

The Benefits of the 179D Tax Deduction in Illinois

Reduce Your Tax Liability
By claiming the 179D deduction, commercial building owners in Illinois can reduce their taxable income significantly, freeing up capital that can be reinvested in your business or used for future projects.
Increase Energy Efficiency
Investing in energy-efficient improvements not only lowers operational costs but also qualifies your building for valuable tax deductions under 179D, creating long-term savings and sustainability.
Maximize Profitability
Through strategic energy-efficient upgrades, you can increase your building’s profitability. The 179D deduction enables you to reduce initial project costs while boosting your overall return on investment.

Who in Illinois Can Benefit from the 179D Deduction?

Building Owners

Building owners in Illinois who make energy-efficient improvements to their properties can unlock substantial tax savings through the 179D deduction. Whether you own a small office building, a retail space, or a large industrial complex, this tax incentive allows you to reduce your tax burden by implementing environmentally sustainable upgrades. The 179D deduction rewards you for making energy-saving changes such as upgrading to energy-efficient lighting systems, improving HVAC systems for optimized heating and cooling, or installing high-performance insulation that reduces overall energy consumption.

For building owners, the 179D deduction offers a powerful way to recoup a portion of the capital investment required for these upgrades. By qualifying for up to $5.00 per square foot in deductions, owners can realize immediate and long-term cost savings, both in terms of reduced energy bills and tax savings. Additionally, energy-efficient buildings can enhance property values and tenant satisfaction, making them more attractive to environmentally conscious businesses or organizations.

Architects, Engineers, and Designers

Architects and engineers in Illinois play a crucial role in the design and construction of energy-efficient buildings, and they too can benefit from the 179D tax deduction. While traditionally the deduction has been claimed by building owners, the 179D deduction also provides unique opportunities for architects, engineers, and contractors working on government-owned properties. When these professionals design energy-efficient features—such as advanced lighting systems, high-efficiency HVAC systems, and building envelopes for government-owned or public-use buildings—they are eligible to claim this deduction for their contributions to reducing energy consumption.

The 179D deduction is a key incentive for architects and engineers looking to promote sustainable design practices. It not only provides financial benefits but also supports your reputation as a leader in green building. Whether you're designing new government buildings or retrofitting existing ones, the 179D deduction offers a chance to claim up to $1.80 per square foot for energy-efficient design. This makes it an attractive incentive for firms looking to increase their project margins while contributing to sustainable development goals.

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What Building Improvements are Eligible under 179D?

Building Envelope
Enhancements to insulation, roofing, windows, and doors.
HVAC Systems
Opting for high-efficiency heating, ventilation, and cooling systems.
Interior Lighting
Installing LED lighting, smart lighting controls, and daylight sensors.
Solar Integration
Harnessing solar power or geothermal systems with cutting-edge technologies.
Hot Water Systems
Efficient water heaters reduce energy usage and can qualify for 179D.
Smart Energy Systems
Automated energy controls optimize usage for energy-efficiency deductions.

Maximizing Your 179D Deduction with Illinois-Specific Opportunities

State-Specific 179D Eligibility and Incentives in Illinois

In addition to the federal 179D tax deduction, each state offers unique energy-efficiency requirements and local incentives that can further enhance your tax savings. Understanding these state-specific eligibility factors and taking advantage of additional incentives will ensure you maximize your return on energy-efficient improvements.

Illinois and Local Energy-Efficiency Incentives

Illinois offers a variety of state and local energy-efficiency incentives that support businesses and property owners in reducing their energy consumption and integrating renewable energy solutions. These programs complement the federal 179D tax deduction.

  1. City Water Light and Power - Commercial Energy Efficiency Rebate Programs: This program provides rebates to commercial property owners for energy-efficient improvements like lighting and HVAC upgrades, helping reduce energy costs [1]
  2. City of Chicago - Small Business Improvement Fund: The Small Business Improvement Fund (SBIF) provides grants to Chicago’s small businesses for energy-efficient upgrades, including new lighting, HVAC, and renewable energy systems [2]
  3. Illinois Municipal Electric Agency - Electric Efficiency Program: This program offers financial incentives to municipal electric customers for implementing energy-efficient improvements, such as lighting, motors, and HVAC systems. [3]
  4. Charging Infrastructure Grant Program: Illinois provides grants to support the installation of electric vehicle charging infrastructure, helping reduce the costs of establishing EV charging stations. [4]
  5. Business Energy Investment Tax Credit (ITC): This federal tax credit supports the installation of renewable energy systems, such as solar and wind, offering financial incentives to businesses that invest in clean energy. [5]
  6. Renewable Electricity Production Tax Credit (PTC): The PTC provides financial incentives to businesses that produce electricity from renewable energy sources, helping offset the cost of energy production. [6]
  7. Alternative Fuel Vehicle Refueling Property Tax Credit: This tax credit encourages the installation of alternative fuel vehicle refueling stations, supporting the expansion of clean transportation infrastructure. [7]

City-Specific Green Building Requirements in Illinois

Illinois has implemented a variety of green building standards to promote energy efficiency, renewable energy adoption, and sustainable development. These requirements help property owners align with state and federal energy-efficiency goals, such as the 179D tax deduction.

Building Energy Code

Illinois’ Building Energy Code establishes minimum standards for energy efficiency in new construction and major renovations, ensuring that buildings meet energy-saving requirements.

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City of Chicago - Green Power Purchasing

Chicago has committed to purchasing 100% renewable energy for all city buildings by 2025, supporting clean energy and sustainable building practices.

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City of Chicago - Solar Zoning Policy

This policy outlines the zoning requirements for solar energy installations in Chicago, facilitating the adoption of rooftop solar systems and promoting renewable energy use.

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Interconnection Standards

Illinois’ interconnection standards govern the process by which renewable energy systems, such as solar and wind, can connect to the grid, ensuring safe and reliable integration.

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Energy Efficiency in State Government

This program promotes energy efficiency initiatives within Illinois’ state government buildings, helping reduce energy consumption and greenhouse gas emissions.

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Cook County - LEED Requirement for County Buildings

Cook County requires its buildings to achieve LEED certification, ensuring that public facilities meet high standards for energy efficiency and sustainable design.

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Frequently Asked Questions

Talk to an expert. No hard sell, ever. We only want to work with you if it's a fit.
Why TaxTaker?

Our specialized accounting and engineering teams have been securing these tax incentives for over a decade. Our highly specialized experience means your business is positioned for the maximum amount of benefit, with the confidence that you've got an accurate and complete deliverable every time. So far we have completed thousands of studies and saved our clients more than $100 million.

We also respect and want you to keep your existing accountant and bookkeeping relationships. We simply cover specific portions of the federal tax code with the finest precision so your existing teams are well supported and you spend your time doing what you do best: building your company - while getting lots of money back every year!

Has my CPA already taken these energy efficiency incentives for me?

It is possible that your CPA has taken other deductions but not necessarily the 179D Tax Deduction. Incentives like 179D and 45L require an in person site visit from an engineer that most CPA’s are not qualified to perform.

Are the energy incentives in the Inflation Reduction Act legit?  

Yes, the energy incentives in the Inflation Reduction Act (IRA) are legitimate and have been designed to promote investments in renewable energy, energy efficiency, and the transition to a cleaner energy economy.  

The Inflation Reduction Act (IRA) introduced several significant updates to key tax incentives, including the Investment Tax Credit (ITC), Section 179D for energy-efficient commercial buildings, Section 30C for alternative fuel vehicle refueling property, and Section 45L for residential energy-efficient property.

When's the best time to see if I'm eligible for these energy incentives?

The best time to evaluate energy incentives like the 179D deduction, 45L tax credit, and the Investment Tax Credit (ITC) is right at the beginning of your project planning phase. Doing this early allows you to design your project to meet specific requirements, ensuring you qualify for maximum benefits and can plan your budget effectively. It also helps you integrate energy-efficient technologies and renewable energy systems from the start, rather than retrofitting later, and gives you ample time to gather necessary documentation for compliance.

What are TaxTaker’s fees?

Working with TaxTaker is risk free. TaxTaker collects a success fee only if you qualify for a tax credit.

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