Related topics

Job Creation and Worker Assistance Act of 2002

Changing to the 168 Allowance

Performing a 168 Allowance Switch

Electing Out of the 168 Allowance

Assets That Qualify for the 168 Allowance

To qualify for the 168 Allowance, an asset must be one of the following:

  • MACRS property with a recovery period of 20 years or less
  • Section 167(f)(1)(B) computer software
  • Water utility property, which has a 25-year recovery period
  • Film, movies and live theatrical productions (placed in service after 9/27/2017)

For property placed in service before 2017, the following also qualified:

Note: Under the CARES Act of 2020, Qualified Improvement Property (QIP) placed in service after 12/31/2017 has a 15-year GDS life and 20-year ADS life and is eligible for the 168 Allowance. Previously, the GDS and ADS lives were 39 and 40 years, respectively.