Upgrade Your System And Save In The Process

The United States recently passed the 2020 “CARES” Act (Coronavirus Aid, Relief, and Economic Security). CARES included a change to the tax code to ensure QIP (Qualified Improvement Property) investments benefit from an expedited tax deduction for the full project cost.

The CARES Act Can Cut Down on Upgrade Expenses

Section 168 of the tax code states that the cost of all equipment and components of the HVAC system, along with other QIP items, qualify for a full tax deduction in the first year. This change is contrary to the historical 39-year term. CARES enables building owners to enhance their building’s Indoor Air Quality (IAQ) with HVAC products ranging from filters to entire systems.

CARES Act Daikin

In light of the current health crisis, IAQ has become a focus for many.  Indoor air can contribute to the health and safety of occupants, as well as structural integrity. The CARES Act provides the potential for significant cost savings now and in the future, from energy expenses to maintenance costs. Notably, for commercial buildings, the HVAC equipment cost for 2020 projects may be fully deducted as a business expense. Now, non-residential building owners can capitalize on HVAC and mechanical system upgrades and replacements. By leveraging a combination of the CARES Act with additional utility rebates making the project investment even more attractive. Finally, this tax benefit is retroactive now through January 1, 2018, for QIP costs incurred.

Why Take Advantage of the CARES Act
Cares Act Example Project


The CARES Act also enables a tax credit for QIP and allows owners to stack local energy rebate savings programs.

The reduced capital investment period from 39 years to one year is a significant advantage. The tax credit includes a 100 percent depreciation bonus of equipment and installation expenses. New investments can be a focus as a result of the increased ROI.  In conclusion, these factors add up to incredible incentives to upgrade to more efficient and safer systems.

To discuss upgrading your HVAC, contact your SVL Sales Representative or click here.