As a Facility Manager, Here’s What You Need to Know
This may come as shock, given the uncertainty due to the pandemic, but right now is actually the perfect time to invest in facility upgrades. The 2020 Coronavirus Aid, Relief, and Economic Stability (CARES) Act permits a full deduction of specific project costs in a single year, with no limitations on project size.
When investing in upgrades – maybe a new UPS, building management system, or HVAC sensors – you’ll receive a tax deduction for the cost of the project. Previously, the deduction was taken over a 39-year period (a 2.5 percent write-off each year) but this is no longer the case.
If you’ve been putting off facility upgrades and waiting for the right time, 2020 is it.
What facilities qualify?
Qualified improvement properties (QIPs), including:
- Hospitals and healthcare facilities
- Office buildings
- Factories and plants
- Logistics facilities
- Any other non-residential property
What facility upgrades will benefit from this accelerated deduction?
Non-structural upgrades (including both equipment and installation costs) to the interior envelope of existing facilities, including:
- Building management systems
- Sensors, valves, actuators, and other HVAC devices
- Uninterruptible power supplies, switchgear, and other electrical distribution equipment
What’s not included in QIPs?
- New construction
- Upgrades to the facility’s structure (expansions, remodeling, etc.)
- Upgrades to the external envelope of the building (windows, doors, roof, etc.)
- Residential structures
- Certain equipment (elevators, etc.)
What else do you need to know?
- There is no limit on the cost of equipment that can be expensed
- It can be combined with other incentives, such as renewable energy tax credits and utility rebates, for extra savings
Improve your facility and write it off in 2020: https://home.treasury.gov/policy-issues/cares
Written by Bailey Mutschler – Marketing Associate, 2NSystems.