A 600,000-square-foot medical nonprofit in Illinois recently completed a $360,000 lighting system upgrade, replacing outdated fixtures with a modern, energy-efficient LED design. The improvements not only enhanced energy performance and cost savings for the hospital but also triggered eligibility for the Section 179D deduction, expanded under the Inflation Reduction Act (IRA).

As a nonprofit entity, the hospital was unable to directly benefit from the deduction, but through TaxTaker’s assistance, the LED designer was successfully allocated the full $360,000 deduction. Our team facilitated the allocation letter process, ensuring compliance and maximizing tax benefits for the designer. This approach allowed the hospital to meet its sustainability goals, reduce energy consumption, and lower operational costs, while the LED designer not only executed their expertise but also secured a substantial tax deduction on top of their contract earnings. This case highlights how strategic tax planning enables both nonprofits and design professionals to benefit from energy-efficient building improvements.