alert-icon
Only limited material is available in the selected language. All content is available on the global site.
  • Solutions Directory
  • Careers
  • Investors

Wolters Kluwer

Wolters Kluwer is a global leader in information, software solutions and services for professionals in healthcare; tax and accounting; financial and corporate compliance; legal and regulatory; corporate performance and ESG.

About Us
  • Who We Are
  • Organization
  • Strategy
  • Newsroom
Insights
  • Artificial Intelligence
  • Future Ready Accountant
  • Future Ready Healthcare
  • Future Ready Lawyer
  • Business Transformation
  • Data Analytics & Reporting
  • Decision Making & Productivity
  • Risk & Regulatory Compliance
  • Business Insights Hub
Get Help
  • Contact Us
  • Login
  • eShop & Bookstores
  • Solutions Directory
  • Careers
  • Investors
PrimaryNav Button
Wolters Kluwer Logo
Search Wolters Kluwer
    No Suggestion
    WK logo
    Visit our global site in English, or select an alternative location or language below
    • Americas
    • Europe
    • Asia & Pacific
    Brazil
    Home page:
    • Portuguese
    Canada
    Home page:
    • English
    • French
    Latin America
    Home page:
    • Spanish
    United States
    Home page:
    • English
    Current Page:
    • English
    Belgium
    Home page:
    • Dutch
    • French
    Czech Republic
    Home page:
    • Czech
    Denmark
    Home page:
    • Denmark
    France
    Home page:
    • French
    Germany
    Home page:
    • German
    Hungary
    Home page:
    • Hungarian
    Italy
    Home page:
    • Italian
    Netherlands
    Home page:
    • Dutch
    Norway
    Home page:
    • Norwegian
    Poland
    Home page:
    • Polish
    Portugal
    Home page:
    • Portuguese
    Romania
    Home page:
    • Romanian
    Slovakia
    Home page:
    • Slovak
    Spain
    Home page:
    • Spanish
    Sweden
    Home page:
    • Swedish
    United Kingdom
    Home page:
    • English
    Australia
    Home page:
    • English
    China
    Home page:
    • Simplified Chinese
    Hong Kong
    Home page:
    • English
    India
    Home page:
    • English
    Japan
    Home page:
    • Japanese
    Malaysia
    Home page:
    • English
    New Zealand
    Home page:
    • English
    Philippines
    Home page:
    • English
    Singapore
    Home page:
    • English
    South Korea
    Home page:
    • English
    Taiwan
    Home page:
    • English
    Thailand
    Home page:
    • English
    Vietnam
    Home page:
    • English
    Primary Navigation
    • Health

      Trusted clinical technology and evidence-based solutions that drive effective decision-making and outcomes across healthcare. Specialized in clinical effectiveness, learning, research and safety.

      Health Overview
      Solutions
      • UpToDateIndustry-leading clinical decision support
      • OvidThe world’s most trusted medical research platform
      • UpToDate LexidrugEvidence-based drug referential solutions
      • Simplifi+ Pharmacy ComplianceAn automated suite of compliance solutions to optimize your operations
      View All Solutions
      Roles
      • Hospital technology leaders
      • Nursing leaders
      • Clinical leaders
      • Pharmacy leaders
      • Health plan executives
      • Medical librarians
      View All Roles
      Expert Insights
      • USP 795 nonsterile compounding compliance: Steps to review, renew, and refocus
      • Less burnout, more breakthroughs: Designing digital tools clinicians trust
      • From consumer to collaborator: How patient-centered care is shaping the future of healthcare
      • How medical libraries can keep pace with artificial intelligence in healthcare
      View All Expert Insights
    • Tax & Accounting

      Enabling tax and accounting professionals and businesses of all sizes drive productivity, navigate change, and deliver better outcomes. With workflows optimized by technology and guided by deep domain expertise, we help organizations grow, manage, and protect their businesses and their client’s businesses.

      Tax & Accounting Overview
      Solutions
      • Tax & Accounting U.S. HubCentral hub for all U.S. solutions
      • CCH Axcess™ SuiteCloud-based tax preparation and compliance, workflow management and audit solution
      • CCH® ProSystem fx®Integrated tax, accounting and audit, and workflow software tools
      • TaxWise®Tax Preparation Software for Tax Preparers
      View All Solutions
      Trending Topics
      • Audit Management
      • Future Ready Accountant
      • Artificial Intelligence (AI) in Tax and Accounting
      • BEPS Pillar Two Compliance
      Expert Insights
      • How to take the pain out of switching tax software
      • OBBBA compliance updates in CCH Axcess Tax and CCH ProSystem fx Tax
      • Scaling success: Integrated tax workflows for smaller firms
      • Key tax provisions for large corporations in the latest 2025 legislation
      View All Expert Insights
    • ESG

      Enterprise software to drive financial and sustainability performance, manage risks, meet reporting requirements, improve safety and productivity, and reduce environmental impact.

      ESG Overview
      Solutions
      • CCH TagetikUnified performance management software
      • Corporate TaxDirect and indirect tax software solutions
      • TeamMateAudit and assurance solutions for corporate and public sector organizations
      • Enablon Software solutions for Environment, Health and Safety (EHS), ESG, and Operational Excellence
      View All Solutions
      Expert Insights
      • Scope Determination & Requirements on Pre-Assurance Advice under the Corporate Sustainability Reporting Directive
      • How IATA Supports Risk-Based Safety Management in Aviation Operations
      • How the Sustainability Reporting Grant helps you fast-track ESG compliance in Singapore
      • AGCO uses Enablon to team up on EHS and Sustainability
      • Q2 EMEA Finance, Risk & Regulatory Webinar: Insights on EBA Pillar 3, Resolution Planning and UK round-up for financial services
      • Strategic Focus: Managing Sustainability Reporting and Carbon Initiatives
      • Verdantix Green Quadrant ESG & Sustainability Reporting Software 2025
      • Energy demands will be a growing concern for AI technology
      View All Expert Insights
    • Finance

      Our solutions for regulated financial departments and institutions help customers meet their obligations to external regulators. We specialize in unifying and optimizing processes to deliver a real-time and accurate view of your financial position.

      Finance Overview
      Solutions
      • CCH TagetikUnified performance management software
      • eOriginal eOriginal securely digitizes the lending process from the close to the secondary market
      • Lien SolutionsMarket leader in UCC filing, searches, and lien management
      • OneSumX for Finance, Risk and Regulatory ReportingIntegrated solution suite for finance, risk, regulatory compliance, and reporting
      View All Solutions
      Expert Insights
      • Beyond the buzz: Practical AI use cases for manufacturing finance
      • Demo: CCH® Fixed Assets Manager
      • Be audit ready for exempt sales with CertifyTax
      • Five key insights from the financial professional survey
      • Six steps to getting big bank tech
      • Banking in 2025: Risk, regulation, and strategic readiness
      • Top seven things community banks and credit unions should look for in a technology partner
      • Unlock the potential of Extended Planning: From FP&A to xP&A
      View All Expert Insights
    • Compliance

      Enabling organizations to ensure adherence with ever-changing regulatory obligations, manage risk, increase efficiency, and produce better business outcomes.

      Compliance Overview
      Solutions
      • BizFilingsSmall business incorporation services
      • Compliance Solutions Gain the visibility, agility, and insight required to better satisfy borrowers, secure capital, and navigate regulatory change
      • TeamMateAudit and assurance solutions for corporate and public sector organizations
      • CT CorporationRegistered agent & business license solutions
      View All Solutions
      Trending Topics
      • Economic and interest rate forecasts
      • Future Ready Lawyer
      Expert Insights
      • Process Safety Management: A Proactive Approach to Risk Management
      • How much do you know about agents for service of process?
      • How to get a commercial grow or retail marijuana license in Colorado
      • Digital contracting adoption rises
      View All Expert Insights
    • Legal

      Serving legal professionals in law firms, General Counsel offices and corporate legal departments with data-driven decision-making tools. We streamline legal and regulatory research, analysis, and workflows to drive value to organizations, ensuring more transparent, just and safe societies.

      Legal Overview
      Solutions
      • MediRegsEasy-to-use tools, calculators and batch analytics reduce hospital error rates by up to 5%
      • Enterprise Legal ManagementLegal spend and matter management, AI legal bill review, and analytics solutions
      • LegiswayAll-in-one legal management software for legal departments
      • VitalLaw® AIIn-depth legal research and practical analysis enhanced with innovative AI technology
      View All Solutions
      Trending Topics
      • Economic and interest rate forecasts
      • Future Ready Lawyer
      Expert Insights
      • Striking the balance: How to make alternative fee arrangements work for everyone
      • Six key strategies for streamlining defined benefit earned income calculations
      • The Justice League approach to vendor management: Cost control and collaboration
      • Inpatient only déjà vu: CMS’s CY2026 OPPS proposal targets IPO list
      View All Expert Insights
    1. Back to Home >
    2. Back to Expert Insights >
    3. CARES Act Makes Qualified Improvement Property Eligible for ...
    blog image
    Tax & AccountingApril 15, 2020|UpdatedDecember 01, 2020

    CARES Act Makes Qualified Improvement Property Eligible for Bonus Depreciation

    By: Wolters Kluwer Tax & Accounting North America United States

    The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes a welcomed technical correction that assigns a 15-year recovery period to qualified improvement property (QIP) placed in service after 2017. Without the technical correction a 39-year recovery period applied.

    While the shortened 15-year recovery period is good news, its real significance is that most post-2017 QIP retroactively qualifies for the bonus depreciation deduction. Any MACRS property with a recovery period of 20 years or less is bonus depreciation property.

    Bonus depreciation of QIP

    QIP placed in service after 2017 now generally qualifies for a 100% bonus deduction. However, QIP considered acquired before September 28, 2017 (e.g., because construction began before that date) does not qualify for the 100% rate even if it is placed in service after 2017. Instead, QIP acquired before September 28, 2017 qualifies for a 40% bonus rate if it is placed in service in 2018, or a 30% bonus rate if it is placed in service in 2019.

    A 100% bonus rate applied to QIP acquired after September 27, 2017 and placed in service in 2017 regardless of the QIP depreciation period. A 50% rate applied to QIP acquired before September 28, 2017 and placed in service in 2017. The technical correction in the CARES Act has no impact on this property.

    QIP definition clarified

    QIP is an internal structural improvement (section 1250 property) made to nonresidential real property after the real property is placed in service.

    However, QIP does not include expenditures attributable to:

    • the enlargement of a building,
    • an elevator or escalator, or
    • the internal structural framework of a building.

    The CARES Act clarifies that the improvement must be “made by the taxpayer.” This means that a taxpayer may not purchase real estate and treat improvements previously made by the seller as QIP. However, this requirement is not expected to affect lessors who gave construction allowances to tenants that allow them to depreciate improvements the tenants built.

    Taking action: Form 3115 and amended return options

    Taxpayers who filed returns that used a 39-year recovery period to depreciate post-2017 QIP file a Form 3115, Application for Change of Accounting Method, or an amended return in order to take advantage of the new 15-year recovery period.

    However, the IRS has informally confirmed that it will issue additional guidance in the coming weeks. Many hope this guidance may provide a simpler method for taxpayers to correct their prior returns. Consequently, practitioners may wish to wait until specifics are released.

    Automatic accounting method changes

    Under general tax accounting rules, taxpayers who filed more than one return that used the now incorrect 39-year recovery period to depreciate QIP have adopted an impermissible method of accounting. Taxpayers usually correct this type of error by:

    1. filing an automatic accounting method change on Form 3115, and
    2. claiming a negative (favorable) section 481 adjustment for the difference between the 100% bonus depreciation deduction and the depreciation that was actually claimed.

    However, a taxpayer that filed only one incorrect return may either file an amended return  or, if more convenient or advantageous, file Form 3115. For example, a taxpayer that placed QIP in service in 2018, and has not yet filed a 2019 return, may file Form 3115 with the 2019 return  rather than filing an amended 2018 return even though an impermissible accounting method was not adopted.

    Example: REAL Corp., a calendar year taxpayer, places QIP in service in 2018 with a cost basis of $100,000 and claims a $2,564 ($100,000/39 years) depreciation deduction. REAL has not filed a 2019 return. REAL may amend its 2018 return before it files its 2019 return and recompute its 2018 taxable income as if by claiming a $100,000 bonus deduction. Alternatively, REAL may file a Form 3115 with its 2019 return and claim a $97,436 deduction ($100,000 bonus depreciation for 2019 – $2,564 deduction claimed for 2018). REAL reports this $97,436 deduction as a section 481 adjustment in computing its 2019 taxable income.

    In addition to filing Form 3115 with the return for the year of change, a taxpayer must file Form 3115 with the IRS’s Ogden Utah office. The Ogden office filing is due when the tax return with the Form 3115 is filed.

    Bonus depreciation elections and QIP

    Some taxpayers may prefer to use a 15-year recovery period, rather than 100% bonus depreciation on 15-year QIP that was depreciated over 39 years. Although bonus depreciation must be claimed on a qualifying property unless a timely election out is made, it is likely that the expected IRS guidance will allow taxpayers to make a late election out in order to use the 15-year recovery period.

    However, taxpayers should be careful with this option. Since QIP is not a separate category of bonus depreciation property after 2017, any late election out should apply to all property within the 15-year class that was placed in service during the tax year. Thus, the election out may not be limited to just to 15-year QIP. Of course, the IRS guidance could provide otherwise.

    Other election-out considerations

    If a late election out of bonus depreciation is allowed the 15-year recovery period applies and the taxpayer has still used an incorrect 39 year recovery period. Consequently, making an election out will not offer an escape from filing a Form 3115 or, alternatively, an amended return unless the IRS guidance provides otherwise.

    On the flip side, the IRS guidance should also allow a taxpayer to revoke an election out of bonus depreciation that was made for the 15-year property class if 15-year QIP was also placed in service and depreciated over 39-years during the tax year of the election out. The taxpayer could then claim bonus depreciation on the QIP and any other 15-year property placed in service during the tax year, by filing Form 3115 or an amended return, or possibly some other method provided in the guidance.

    The IRS may need to address one additional election. Taxpayers could elect to apply the 50% bonus rate in place of the 100% rate to all qualified property acquired and placed in service after September 28, 2017 during the taxpayer’s tax year that includes September 28, 2017. Taxpayers should be allowed to make or revoke this election if they placed QIP in service in 2018 during a 2017/2018 fiscal year and used the 39-year recovery period.

    For additional information see the following CCH Answer Connect explanations:

    Property Qualifying for Bonus Depreciation

    Incorrect Depreciation Claimed/Accounting Method Changes

    By Ray G. Suelzer, J.D., LL.M.

    Login to read more on CCHAnswerConnect.

    Not a subscriber? Sign up for a free trial or contact us for a representative.

    The Wolters Kluwer Logo
    Wolters Kluwer Tax & Accounting North America United States
    Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency.

    Explore related topics

    Expert insightsFederal Tax News and LegislationTax
    Solutions for Tax & Accounting Professionals

    Tax, accounting, workflow, and firm management solutions to help your firm succeed, with the research tools you need to stay informed.

     

    U.S. Tax & Accounting Hub
    How we help
    Professional Tax Software
    Tax & Accounting Research

    Related insights

    Can your tech stack handle complex returns? Scaling success: Integrated tax workflows for smaller firms Key tax provisions for large corporations in the latest 2025 legislation

    Related Insights

    • How to take the pain out of switching tax software
      Article
      Tax & Accounting
      August 26, 2025

      How to take the pain out of switching tax software

      To demonstrate how we work with firms throughout the implementation process and afterwards, we’ve prepared a series of short videos.
      Learn More
    • Can your tech stack handle complex returns?
      Article
      Tax & Accounting
      Updated August 26, 2025

      Can your tech stack handle complex returns?

      Boost your small firm's productivity with integrated tax prep software that supports growth, automation, and multi-state client needs.
      Learn More
    • Scaling success: Integrated tax workflows for smaller firms
      Article
      Tax & Accounting
      August 21, 2025

      Scaling success: Integrated tax workflows for smaller firms

      Discover how an integrated digital tax workflow helps small firms save time, reduce errors, and improve client service. This white paper shows how automation and connected systems streamline tax preparation and unlock new growth opportunities.
      Learn More
    • Key tax provisions for large corporations in the latest 2025 legislation
      Article
      Tax & Accounting
      August 21, 2025

      Key tax provisions for large corporations in the latest 2025 legislation

      Breakdown of the most relevant changes from OBBBA and what they mean for corporate taxpayers
      Learn More
    Footer Navigation
    • About Wolters Kluwer
    • Strategy
    • Organization
    • Management
    • News & Press Releases
    • Events
    • Solutions Directory
    • Health
    • Tax & Accounting
    • ESG
    • Finance
    • Compliance
    • Legal
    • Expert Insights
    • Careers
    • Investors
    • Sitemap
    • Site Owner

    Wolters Kluwer Tax & Accounting US

    • My Account
    • Shop
    • Support
    • Product Training
    • Product Login
    Follow Wolters Kluwer US
    • Facebook
    • Twitter
    • LinkedIn
    • Instagram
    • YouTube
    Wolters Kluwer Logo

    When you have to be right

    • Terms of Use
    • Privacy & Cookies
    • Your California Privacy Choices
      Your California privacy Choices

    © 2025 Wolters Kluwer N.V. and/or its subsidiaries. All rights reserved.

    Back To Top