{"id":1047,"date":"2020-08-10T13:05:26","date_gmt":"2020-08-10T17:05:26","guid":{"rendered":"http:\/\/www.michiganair.com\/blog\/?p=1047"},"modified":"2020-08-10T13:08:05","modified_gmt":"2020-08-10T17:08:05","slug":"what-facility-managers-need-to-know-about-the-2020-cares-act-tax-benefits","status":"publish","type":"post","link":"https:\/\/www.michiganair.com\/blog\/what-facility-managers-need-to-know-about-the-2020-cares-act-tax-benefits\/","title":{"rendered":"What Facility Managers Need to Know about the 2020 CARES Act Tax Benefits"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"http:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/pexels-burst-544965-1024x683.jpg\" alt=\"\" class=\"wp-image-1049\" srcset=\"https:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/pexels-burst-544965-1024x683.jpg 1024w, https:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/pexels-burst-544965-300x200.jpg 300w, https:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/pexels-burst-544965-768x512.jpg 768w, https:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/pexels-burst-544965-1080x720.jpg 1080w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong> Write off 100% of qualifying facility improvement costs <\/strong><\/p>\n\n\n\n<p>It may seem surprising, given the economic uncertainty caused by the pandemic, but right now is an excellent time to invest in non-residential facility upgrades.<\/p>\n\n\n\n<p>Here\u2019s why: When you invest in upgrades \u2014 e.g., install a new HVAC system \u2014 you get a tax deduction for the project costs. In the past, this deduction was taken over a 39-year period, resulting in a 2.5 percent write-off each year. <\/p>\n\n\n\n<p>That\u2019s 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.<\/p>\n\n\n\n<p>If you\u2019ve been waiting for the right time to make major facility upgrades, the wait is over. <\/p>\n\n\n\n<p>WHAT FACILITIES QUALIFY FOR THE FULL DEDUCTION?<\/p>\n\n\n\n<p>Qualified improvement properties (QIPs), including: <\/p>\n\n\n\n<p>\u2022 Hospitals and healthcare facilities \u2022 Office buildings \u2022 Factories and plants \u2022 Logistics facilities \u2022 Any other non-residential property <\/p>\n\n\n\n<p>WHAT ISN\u2019T INCLUDED IN QIPS? <\/p>\n\n\n\n<p>\u2022 New construction \u2022 Upgrades to the facility\u2019s structure  (e.g., expansions, remodeling, etc.) \u2022 External envelope of the building  (e.g., windows, doors, roof, cladding) \u2022 Residential structures \u2022 Certain equipment (e.g., elevators)<\/p>\n\n\n\n<p>WHAT FACILITY UPGRADES CAN BENEFIT?<\/p>\n\n\n\n<p> Non-structural upgrades (including both equipment and installation costs) to the interior envelope of existing facilities, including: <\/p>\n\n\n\n<p>\u2022 Building management systems \u2022 Sensors, valves, actuators, &amp; other HVAC devices \u2022 Uninterruptible power supplies, switchgear, and other electrical distribution equipment  <\/p>\n\n\n\n<p>WHAT ELSE DO YOU NEED TO KNOW ABOUT THE SECTION 168 DEDUCTION? <\/p>\n\n\n\n<p>\u2022 There\u2019s no limit on the cost of equipment that can be expensed. \u2022 You can combine it with other incentives, such as  renewable energy tax credits and utility rebates. <\/p>\n\n\n\n<p> EXAMPLE CASH SAVINGS OF A QIP PROJECT COST<\/p>\n\n\n\n<p>A fictional hospital invests $1,000,000 in a humidifier system upgrade replacing a number of outdated units with a <a href=\"http:\/\/WWW.MICHIGANAIR.COM\/MANUFACTURERS\/NORTEC\">Condair<\/a> DL Series hybrid humidifier package. <\/p>\n\n\n\n<p>The chart shows the tax benefits before and after the changes the CARES Act made to Section 168 of the tax code.<\/p>\n\n\n\n<p> The benefit of the accelerated depreciation results in a cash savings of $204,615 in year one.<\/p>\n\n\n\n<p>If you combine the savings of the CARES act along with local state rebates for energy tax credits or utility rebates, your savings can be increased even further.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"697\" height=\"205\" src=\"http:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/cares-act-savings.png\" alt=\"\" class=\"wp-image-1048\" srcset=\"https:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/cares-act-savings.png 697w, https:\/\/www.michiganair.com\/blog\/wp-content\/uploads\/2020\/08\/cares-act-savings-300x88.png 300w\" sizes=\"(max-width: 697px) 100vw, 697px\" \/><\/figure>\n\n\n\n<p>Contact us today (sales@michiganair.com) to discuss how we can help you take advantage of the CARES Act incentive.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Write off 100% of qualifying facility improvement costs It may seem surprising, given the economic uncertainty caused by the pandemic, but right now is an excellent time to invest in non-residential facility upgrades. Here\u2019s why: When you invest in upgrades \u2014 e.g., install a new HVAC system \u2014 you get a tax deduction for the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1049,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-1047","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>What Facility Managers Need to Know about the 2020 CARES Act Tax Benefits - Michigan Air Products Blog<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.michiganair.com\/blog\/what-facility-managers-need-to-know-about-the-2020-cares-act-tax-benefits\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"What Facility Managers Need to Know about the 2020 CARES Act Tax Benefits - Michigan Air Products Blog\" \/>\r\n<meta property=\"og:description\" content=\"Write off 100% of qualifying facility improvement costs It may seem surprising, given the economic uncertainty caused by the pandemic, but right now is an excellent time to invest in non-residential facility upgrades. 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