2025 Fire Sprinkler Tax Incentives Guide

Maintenance and upgrade costs for fire protection systems can add up quickly for any property owner, but these services are essential in staying compliant with applicable codes as well as protecting your property. Luckily, tax incentives are available to assist businesses in offsetting fire sprinkler-related expenses while maintaining compliance.

Key Fire Sprinkler Tax Provisions for 2025

The most significant tax incentive to note for 2025 is the Section 179 deduction. Section 179 expensing allows you to deduct the entire purchase price of any qualifying fire sprinkler equipment or software you acquire or finance during the tax year, making it an excellent option for small and medium-sized businesses that need services. Qualifying system equipment includes:

• Fire alarms
• Sprinkler systems
• Fire suppression systems
• Smoke detectors
• Emergency lighting

Business owners can also take advantage of bonus depreciation if a fire protection retrofit is installed in a nonresidential building. Systems placed in service from 2023 to 2026 are qualified for bonus depreciation in a phase-down schedule. Systems placed in service in 2025 will qualify for a 40% depreciation bonus, and those placed in service in 2026 will qualify for a 20% bonus — so installing or upgrading your fire sprinkler as soon as possible is in your best interests for securing IRS tax breaks for fire protection.

How to Claim Fire Sprinkler Tax Deductions

To claim the Section 179 fire sprinkler deduction or bonus depreciation, there are a few key steps to take.

1. Determine whether your fire sprinkler system qualifies as Qualified Improvement Property (QIP).
2. Complete IRS Form 4562, using Part I for Section 179 or Part II for bonus depreciation.
3. Maintain detailed records of specifications, dates, and costs related to installation.
4. Work with a tax professional to ensure complete compliance.

Other Tax Credits & Incentives

There are also multiple state-level incentives for fire protection upgrades, such as:

• NYSERDA Enabling Innovative Clean Energy Building Solutions Program: Offers up to $1 million for projects with prior funding from a government entity or foundation that aim to enhance building system performance and resiliency.
• New York Community Impact Grant Program: Funds nonprofit and tribal organizations with projects that address environmental and public health concerns.
• 1772 Foundation Historic Preservation Grants: Supports historic New Hampshire preservation projects, including fire protection upgrades with grants up to matching $10,000.
• Rural Fire Protection Grant Program: Supports enhanced rural fire suppression projects up to $10,000 per project in Vermont.
• Building Communities Grants: Supports Vermont nonprofits, regional economic development organizations, and municipalities with matched grants up to $25,000 for safety upgrades in community facilities.
• Code-Based Incentives: Vermont’s fire and building codes provide various incentives for fire sprinkler system installations.

Why Work With a Fire Protection Specialist?

The complexities involved in ensuring tax credit and other incentive eligibility can quickly become a headache if you’re not working with a qualified professional fire protection contractor. A specialist has access to all the knowledge and resources necessary to ensure local and federal compliance on your behalf and streamline the process for claiming all incentives you qualify for.

Why Choose Firetech?

Firetech Sprinkler Corp. is prepared to walk you through tax deductions for building fire safety upgrades as part of our comprehensive process, and we’ve been the preeminent fire protection professionals in Vermont, Northern New Hampshire, and Northeast New York since 1992. With NICET certification and multiple industry affiliations, we take our reputation seriously and ensure the attention to detail necessary to make fire safety services simple for business owners like you.

To learn more about securing 2025 incentives for fire sprinkler upgrades and more, contact Firetech today.