Facilities Managers – Great Time for Upgrades!
Write off 100% of qualifying facility improvement costs!
Because of the pandemic, now is an exceptional time to invest in non-residential facility upgrades.
Here’s why: When you invest in upgrades — e.g., install a new HVAC system — you get a tax deduction for the project costs. In the past, this deduction was taken over a 39 years, resulting in a 2.5 percent write-off each year.
That’s now changed. The 2020 Coronavirus Aid, Relief, and Economic Stability (CARES) Act allows a full deduction of certain project costs in a single year, without limitation on the size of the project. These amended rules apply retroactively to property acquired and placed in service after September 27, 2017, and continue ahead through December 31, 2022. If you’ve been waiting for the right time to make major facility upgrades, the wait is over.
What upgrades qualify?
- Building management systems
- Uninterruptible power supplies, switchgear, and other electrical distribution equipment
- Sensors, valves, actuators, and other HVAC devices
Does my Facility Qualify? Here are some that do:
- Office buildings
- Factories and plants
- Hospitals and healthcare facilities
- Logistics facilities
- Any other non-residential property
What isn’t included?
- New construction
- Upgrades to the facility’s structure (e.g., expansions, remodeling, etc.)
- The external envelope of the building (e.g., windows, doors, roof, cladding)
- Residential structures
- Certain equipment (e.g., elevators)
More Good News:
- There’s no limit on the cost of equipment that can be expensed.
- You can combine it with other incentives, such as renewable energy tax credits and utility rebates, for extra savings.
- Modernization and energy efficiency upgrades typically pay for themselves in a few years.
OJS Building Services, Inc. and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Accordingly, you should consult your tax, legal, and accounting advisors before engaging in any transaction.