IRS bonus depreciation expires end‑2026
- The premise is outdated: the Internal Revenue Service says Congress restored 100% bonus depreciation for eligible property acquired after January 19, 2025, replacing the old phasedown. - Internal Revenue Service guidance issued January 14, 2026 says taxpayers can claim permanent 100% first-year depreciation, though some may elect 40% instead in the first tax year. - The old 2026 expiration schedule still applies only to some property acquired before January 20, 2025. (irs.gov)
The “bonus depreciation expires at the end of 2026” line is no longer right under current federal tax law. (irs.gov) The Internal Revenue Service said on January 14, 2026 that Notice 2026-11 gives taxpayers guidance on a permanent 100% additional first-year depreciation deduction for eligible property acquired after January 19, 2025. (irs.gov) That change came from Public Law 119-21, which IRS Publication 946 says reinstated 100% bonus depreciation for certain qualified property acquired and placed in service after January 19, 2025. (irs.gov) Bonus depreciation is the extra first-year writeoff businesses can take when they buy qualifying equipment, machinery, and some other depreciable property instead of spreading the deduction across many years. (irs.gov) The older phasedown schedule did exist. IRS Publication 946 says certain qualified property acquired after September 27, 2017 and placed in service in calendar 2025 was limited to a 40% special depreciation allowance, with 60% for some long-production-period property and certain aircraft. (irs.gov 1) (irs.gov 2) But that older schedule now applies only to a narrower bucket: property acquired before January 20, 2025 that falls under the pre-amendment rules. (irs.gov) The practical date to watch is January 19, 2025. Property acquired after that date can qualify for the restored 100% deduction, while property acquired before that date may still be stuck in the old phasedown framework. (irs.gov 1) (irs.gov 2) IRS also says taxpayers may elect 40% instead of 100% for qualified property placed in service during the first tax year ending after January 19, 2025, with 60% for certain longer-production-period property and aircraft. (irs.gov 1) (irs.gov 2) Used property can still qualify if it meets the section 168(k) acquisition rules, and taxpayers who want out of bonus depreciation must make an election with Form 4562 by the return due date, including extensions. (irs.gov) So the current explainer is not “claim it before December 31, 2026 or lose it.” Under the Internal Revenue Service’s 2026 guidance, Congress already replaced that cliff for newly acquired eligible property with a permanent 100% rule. (irs.gov)
