2026 Bonus Depreciation Percentage
The 2026 Bonus Depreciation Percentage is 100%.
Effective 2026-01-01Source: Notice 2026-11 (IRS)Verified 2026-08-29
Compared with 2025
Every figure on this page is unchanged from 2025.
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Special depreciation allowance | 100% | 100% | +0% (+0.0%) |
Who it applies to
Taxpayers who acquire and place in service qualified property, or who plant or graft specified plants, for which a § 168(k) additional first year depreciation deduction is available.
What changed this year, and why
For 2026, the special depreciation allowance (bonus depreciation) under § 168(k) is 100 percent, effective for qualified property acquired after January 19, 2025, as provided by the One, Big, Beautiful Bill Act (OBBBA).
Common questions
- What is the bonus depreciation percentage for 2026?
- For 2026, the bonus depreciation percentage (special depreciation allowance) under § 168(k) is 100 percent, as set by the One, Big, Beautiful Bill Act for qualified property acquired after January 19, 2025.
What the percentage is applied to, and what is left afterwards
This passage explains the mechanical relationship between the special depreciation allowance (bonus depreciation) and regular MACRS depreciation. After you calculate the bonus depreciation amount for your qualified property or qualified production property, the remaining cost - that is, the original cost minus the allowance - becomes the basis on which you compute regular MACRS depreciation. In practical terms, you must first subtract the special depreciation allowance from the property's depreciable basis before applying the applicable MACRS rate to what is left. For 2026, the special depreciation allowance is 100%. Because the allowance is taken upfront, the basis available for year-by-year regular depreciation is reduced by that same 100% amount. Once the full 100% allowance has been deducted in the year the property is placed in service, there is no remaining cost left to depreciate under MACRS for that asset. The passage makes clear that the two steps are sequential: figure the allowance first, reduce basis, then figure regular depreciation on the reduced amount.
Depreciating the remaining cost. After you figure your special depreciation allowance for your qualified property or qualified production property, you can use the remain- ing cost to figure your regular MACRS depreciation de- duction (discussed in chapter 4). Therefore, you must re- duce the depreciable basis of the property by the special depreciation allowance before figuring your regular MACRS depreciation deduction.
Publication 946 (2025), How To Depreciate Property (IRS)
Electing out, by class of property
Taxpayers are not required to take the special depreciation allowance if they prefer to depreciate the entire cost of their property over time under regular MACRS. The IRS permits an election to opt out, but the election must be made on a class-by-class basis. You cannot pick and choose individual assets; you must elect out for every item of property that falls within the same asset class placed in service during that tax year. To make the election, you must attach a statement to your tax return that clearly identifies which class of property you are electing out of. Each person who owns qualified property - such as a partnership, an S corporation, or a member of a consolidated group - must make the election separately. The election is generally due 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.
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 (2025), How To Depreciate Property (IRS)
Recapture when you dispose of the property
When you sell or otherwise dispose of property for which a special depreciation allowance was previously claimed, the tax code requires you to recapture part or all of the gain as ordinary income rather than capital gain. The recapture amount is limited to the total special depreciation allowance that was allowed or allowable on the property. In other words, you cannot treat as capital gain any portion of the sale proceeds that represents a recovery of the accelerated depreciation you already deducted. For 2026, the special depreciation allowance is 100% of the property's basis, so the recapture potential can be substantial. If you sell the property for more than its original cost, any gain above the amount of the special depreciation allowance may qualify for capital gain treatment, but the portion of gain equal to the allowance is always ordinary income. Taxpayers should consult the rules on MACRS depreciation recapture for detailed guidance on calculating the recapture amount.
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 (2025), 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.
Notice 2026-11 (IRS)
- Special depreciation allowance
replaced the annual phasedown of the applicable percentage for the § 168(k) additional first year depreciation deduction with a permanent 100 percent additional first year depreciation deduction for qualified property acquired, or specified plants planted or grafted, after January 19, 2025.