2022 Bonus Depreciation Percentage
The 2022 Bonus Depreciation Percentage is 100%.
Effective 2022-01-01Source: 2022 Instructions for Form 4562 (IRS)Verified 2026-09-03
Compared with 2021
Every figure on this page is unchanged from 2021.
| Item | 2021 | 2022 | Change |
|---|---|---|---|
| Special depreciation allowance | 100% | 100% | +0% (+0.0%) |
Who it applies to
Taxpayers who place qualified property in service during 2022, including tangible property depreciated under MACRS with shorter recovery periods, computer software, water utility property, qualified film and television productions, and certain specified plants bearing fruits and nuts planted or grafted before January 1, 2023.
What changed this year, and why
The bonus depreciation percentage (special depreciation allowance) for 2022 is 100% of the depreciable basis for qualified property placed in service before January 1, 2023.
Common questions
- What is bonus depreciation?
- The special depreciation allowance, commonly called bonus depreciation, is an additional first-year deduction allowed for certain qualified property. For 2022, it permits a deduction equal to 100% of the depreciable basis of eligible property placed in service during that year.
- Was the 2022 rate different from 2021?
- Yes. For 2021, the bonus depreciation percentage was also 100%.
Every amount on this page is a published figure rather than yours. The First-year bonus depreciation on an asset takes the number you enter and works it out against them, showing which published figure it used.
What the percentage is applied to, and what is left afterwards
The special depreciation allowance is computed on the property's cost or other basis that is eligible for bonus depreciation. Once that allowance is taken, the basis used for the regular MACRS depreciation schedule is not the original cost - it must first be reduced by the dollar amount of the special depreciation allowance already deducted. For 2022, the special depreciation allowance rate is 100%, which typically means the entire eligible basis is recovered in the year the property is placed in service, leaving no remaining basis for regular MACRS depreciation in that case. When only a portion of the cost is eligible (for example, if part of the basis was taken as a section 179 deduction or only a fraction of the property is used for business), the allowance is applied to the eligible remaining amount, and whatever cost is still left after the allowance becomes the new depreciable basis for the regular MACRS calculation in subsequent years.
Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before fig- uring your regular MACRS depreciation deduction.
Publication 946 (2022), How To Depreciate Property (IRS)
Electing out, by class of property
A taxpayer may choose not to take the 100% special depreciation allowance at all, but the election is made class-by-class rather than asset-by-asset. Once the election is filed for a given class of property, it applies to every item in that class placed in service during the tax year and cannot be revoked without IRS consent. The election is made by attaching a statement to the return for the year the property is placed in service, and it must be made separately by each person owning the property (for example, each partnership, each S corporation, or each member of a consolidated group).
You can elect, for any class of property, not to deduct any special depreciation allowances for all property in such class placed in service during the tax year.
Publication 946 (2022), How To Depreciate Property (IRS)
Recapture when you dispose of the property
When property for which a special depreciation allowance was claimed is later sold or otherwise disposed of, the tax code generally requires that any gain recognized on the disposition be recaptured as ordinary income, but only to the extent of the special depreciation allowance previously allowed or allowable. In effect, the portion of the asset's cost that was recovered through the bonus allowance is treated as ordinary income rather than capital gain when the asset leaves the taxpayer's hands. This rule applies regardless of whether the full 100% rate for 2022 was applied in the year the property was placed in service; if the allowance was less than the full basis, the recapture ceiling is limited to the amount actually allowed. The same general MACRS recapture rules apply for determining the timing and character of the income recognized on the disposition.
When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposi- tion is generally recaptured (included in income) as ordi- nary income up to the amount of the special depreciation allowance previously allowed or allowable.
Publication 946 (2022), How To Depreciate Property (IRS)
Lease the building to someone else running the production activity, and you generally do not qualify
When you lease a building to another party that runs the production activity, you generally do not qualify for the special depreciation allowance on that property. The allowance is intended for taxpayers who directly use the property in their own production operations or who meet specific exceptions. Leasing the property to someone else, even if they use it for production, typically disqualifies you from claiming the allowance. There are limited exceptions for certain related-party transactions or specific types of property, but the general rule is that leasing out qualified production property prevents you from taking the bonus depreciation. If you are considering leasing a building used in production activity, you should verify whether any exceptions apply before relying on the special depreciation allowance.
Property you acquire only for the production of in- come, such as investment property, rental property (if renting property is not your trade or business), and prop- erty that produces royalties, does not qualify.
Publication 946 (2022), How To Depreciate Property (IRS)
Both the date you acquired the property and the date you placed it in service decide which percentage applies
For certain property, the date you acquired it and the date you placed it in service together determine whether the 100% special depreciation allowance applies. In general, to qualify for the full allowance, the property must be acquired and placed in service within specific time periods set by the tax code. If the property was acquired after certain dates but not yet placed in service, or if it was placed in service after specific cutoff dates, a reduced percentage may apply instead. The rules distinguish between when you obtained the property and when you actually began using it in your business or income-producing activity, and both dates must fall within the required windows for the 100% rate to apply. Property with longer production periods or certain aircraft may have different timing requirements. You must check both the acquisition date and the placed-in-service date against the applicable rules to determine which bonus depreciation percentage your property qualifies for.
The special depreciation allowance is 80% for certain qualified property acquired after September 27, 2017, and placed in service after December 31, 2022, and before January 1, 2024 (other than certain property with a long production period and certain aircraft).
Publication 946 (2022), How To Depreciate Property (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2022 Instructions for Form 4562 (IRS)
- Special depreciation allowance
Certain qualified property (defined below) acquired after September 27, 2017, and placed in service before January 1, 2023 (or before January 1, 2024, for certain property with a long production period and for certain aircraft), is eligible for a special depreciation allowance of 100% of the depreciable basis of the property.