2020 CARES Act Section 168 Tax Benefits - There's Still Time

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.  There is still time to take advantage of Section 168 benefits.

What facilities qualify for the full deduction?

Qualified improvement properties (QIPs), include:

  • Hospitals and healthcare facilities
  • Office buildings
  • Factories and plantS
  • Logistics facilities
  • Any other non-residential property

What is included?
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 (UPS), switchgear, and other electrical distribution equipment

What is not included in Quality Improvement Projects (QIPs)?

  • 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

Schneider Electric, one of LEDG’s partners, put together a chart below that easily explains how the Section 168 deduction works. It is also important to know that there is no limit to the cost of equipment that can be expensed and it can be combined with other incentives and rebates that are available state by state.

The chart is available as a PDF as well.

If you have any questions, please do not hesitate to reach out to LEDG at info@ledesigngroup.com