2024 Bonus Depreciation Percentage
The 2024 Bonus Depreciation Percentage is 60%.
Effective 2024-01-01Source: 2024 Instructions for Form 4562 (IRS)Verified 2026-09-02
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Special depreciation allowance | 80% | 60% | -20% (-25.0%) |
Who it applies to
Taxpayers who place qualified property in service during the 2024 tax year
What changed this year, and why
For 2024, the special depreciation allowance (bonus depreciation) for most qualified property placed in service is 60% of the depreciable basis.
Common questions
- What is the bonus depreciation percentage for 2024?
- The special depreciation allowance for most qualified property placed in service in 2024 is 60% of the depreciable basis. Certain property with a long production period and certain aircraft are eligible for a higher percentage.
- When does the special depreciation allowance apply?
- The special depreciation allowance is an additional first-year deduction. It is taken after any section 179 expense deduction and before regular depreciation under MACRS.
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
For 2024, the special depreciation allowance (bonus depreciation) percentage is 60%. This percentage is applied to the depreciable basis of qualified property - generally the cost or other basis of the property that is eligible for the allowance. Once the 60% allowance is calculated and deducted, the depreciable basis of the property must be reduced by that amount before regular MACRS depreciation is figured. The remaining cost is then depreciated under the applicable MACRS rules over the property's recovery period. In effect, the bonus depreciation provides an upfront deduction equal to 60% of the depreciable basis, and the taxpayer claims regular depreciation deductions only on the balance that is left after the allowance is subtracted. This ordering rule ensures that the same portion of basis is not depreciated twice - once through the special allowance and again through the regular depreciation schedule.
Depreciating the remaining cost. After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4). 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 (2024), How To Depreciate Property (IRS)
Electing out, by class of property
Under the special depreciation allowance rules, a taxpayer may choose not to claim bonus depreciation for a particular class of property. The election is made on a class-by-class basis, meaning the taxpayer can opt out for one class of assets while still claiming the allowance for other classes placed in service during the same tax year. To make the election, the taxpayer must attach a statement to the tax return indicating what election is being made and identifying the class of property for which the election applies. Each person owning qualified property must make the election separately - for example, partnerships elect for themselves, S corporations elect for themselves, and each member of a consolidated group makes the election through the common parent. Generally, the election must be made on a timely filed return (including extensions) for the year the property is placed in service. Once made, the election is irrevocable without IRS consent. In 2024, the special depreciation allowance is 60%, so electing out means forgoing that 60% upfront deduction for the chosen class.
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 (2024), How To Depreciate Property (IRS)
Recapture when you dispose of the property
When a taxpayer disposes of property for which a special depreciation allowance was previously claimed, the gain on that disposition is generally recaptured as ordinary income. The recapture amount is limited to the lesser of the gain realized or the total special depreciation allowance that was allowed or allowable on the property. This means that even if the taxpayer did not actually claim the allowance in a prior year, the amount that could have been claimed is still treated as recaptured if it exceeds the gain. The ordinary income recapture rules apply before any remaining gain is treated as capital gain or section 1231 gain. For certain specialized property - such as qualified GO Zone property - additional recapture rules may apply if the property ceases to be used in the designated zone, potentially requiring the taxpayer to include in income the excess benefit received from having claimed the allowance. Taxpayers should consult the recapture provisions in chapter 4 and applicable IRS notices for details on these special situations.
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 (2024), How To Depreciate Property (IRS)
Lease the building to someone else running the production activity, and you generally do not qualify
Under federal tax law, leasing out qualified property to another person who uses it in their own production activity generally disqualifies that property from the special depreciation allowance. The rule applies because the allowance is intended to benefit the owner who uses the property directly in a qualified business use, not an owner who passes the property through to a lessee engaged in manufacturing or similar production work. If you lease the building or equipment to a tenant running a production operation, you generally cannot claim the 60% special depreciation allowance for 2024 on that property. There are limited exceptions for certain aircraft and property with long production periods, which may still qualify under different rules, but for ordinary qualified property the leasing arrangement removes your eligibility. Before claiming the allowance on property you lease to others, confirm that no exclusion applies to your specific situation.
Phase down of special depreciation allowance. The special depreciation allowance is 60% for certain qualified property acquired after September 27, 2017, and placed in service after December 31, 2023, and before January 1, 2025 (other than certain property with a long production period and certain aircraft).
Publication 946 (2024), How To Depreciate Property (IRS)
Both the date you acquired the property and the date you placed it in service decide which percentage applies
The percentage of the federal special depreciation allowance that applies to your property depends on two dates: when you acquired it and when you placed it in service. For the special depreciation allowance to apply at any given rate, the property must have been acquired after September 27, 2017 and must also have been placed in service within a specific calendar window. For 2024, property that meets these conditions is eligible for the 60% allowance, but property placed in service outside that window - for example after January 1, 2025 - falls under a different percentage under the phase-down schedule. Both dates must be checked because the acquisition date and the placed-in-service date can differ, and the allowance percentage that applies is the one tied to the window in which the placed-in-service date falls.
The special depreciation allowance is 60% for certain qualified property acquired after September 27, 2017, and placed in service after December 31, 2023, and before January 1, 2025 (other than certain property with a long production period and certain aircraft).
Publication 946 (2024), How To Depreciate Property (IRS)
Basis the passenger-auto cap kept you from deducting is not lost - it continues after the recovery period
For passenger automobiles subject to the annual depreciation cap, the portion of basis that the cap prevented you from deducting during the recovery period is not lost. If you continue to use the automobile for business after the recovery period ends, you can keep deducting that unrecovered basis year by year until it is fully recovered. The maximum deduction you may claim in each succeeding year is set by the date the car was placed in service and by your business-use percentage. This rule ensures that the annual passenger-auto cap - which applies jointly to regular depreciation, section 179, and the special depreciation allowance - does not permanently reduce the total depreciation you are entitled to take; it simply spreads the unrecovered amount over additional years once the recovery period is complete.
If the depreciation deductions for your automobile are re- duced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends.
Publication 946 (2024), 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.
2024 Instructions for Form 4562 (IRS)
- Special depreciation allowance
Certain qualified property (defined below) acquired after September 27, 2017, and placed in service after December 31, 2023, and before January 1, 2025 (other than property with a long production period and certain aircraft), is limited to a special depreciation allowance of 60% of the depreciable basis of the property.