100% Bonus Depreciation is Back: What Your Business Needs to Know for 2026

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If you have been holding off on major equipment purchases or facility upgrades, the wait is over. The “One Big Beautiful Bill” (OBBB) Act has officially restored 100% Bonus Depreciation, reversing the planned phase-down and giving business owners a powerful tool to slash their 2026 tax liability.

At Nexus Tax Books, we’ve analyzed the latest IRS guidance and the Forbes reports to bring you the definitive guide on how to leverage these changes to maximize your cash flow.

What is the New 100% Bonus Depreciation Rule?

Under the previous Tax Cuts and Jobs Act (TCJA), bonus depreciation was scheduled to drop to 0% by 2027. However, the OBBB Act has permanently reinstated the 100% additional first-year depreciation for qualified property.+1

Key Dates for Eligibility:

  • Property Acquired & Placed in Service: Generally must be after January 19, 2025.
  • The “Binding Contract” Trap: If you signed a written binding contract before January 20, 2025, the asset may only qualify for the previous 40% rate. Timing is everything.

Qualified Production Property (QPP): The Game Changer

For the first time, the OBBB Act introduces a massive incentive for manufacturers and producers: Qualified Production Property (QPP).

Typically, nonresidential buildings are depreciated over 39 years. Under the new law, if you construct a facility integral to manufacturing in the U.S., you may be able to deduct 100% of the construction costs in year one.

To qualify for QPP:

  1. Construction must begin after January 19, 2025.
  2. The property must be placed in service before January 1, 2031.
  3. It must be located within the United States.

Strategic Moves for Small Businesses

The OBBB Act didn’t just stop at bonus depreciation. It also boosted Section 179 expensing:

  • Deduction Limit: Increased to $2.5 Million.
  • Phase-out Threshold: Increased to $4 Million.

Nexus Pro Tip: Use Section 179 for specific assets like roofs and HVAC systems that may not qualify for 100% bonus depreciation but are now eligible for immediate expensing.

[Lead Magnet] Get the 2026 Tax Strategy Roadmap

Don’t leave your 2026 savings to chance. Download our OBBB Act Implementation Checklist to ensure your purchases meet the strict “placed in service” requirements.

Frequently Asked Questions (FAQ)

1. Does 100% bonus depreciation apply to used equipment?

Yes. Under the OBBB Act, as long as the used property was not previously used by the taxpayer and meets specific acquisition requirements, it qualifies for the 100% deduction.

2. What happens if I bought equipment in late 2024?

Equipment placed in service in 2024 generally falls under the 60% bonus depreciation rate. The 100% rate is specifically for assets acquired and placed in service after the January 19, 2025, effective date.+1

3. Can I use 100% bonus depreciation to create a tax loss?

Yes. Unlike Section 179, bonus depreciation can create or increase a Net Operating Loss (NOL), which can often be carried forward to offset future income.

4. Is “Qualified Improvement Property” (QIP) included?

Yes. Interior improvements to commercial buildings (excluding elevators, escalators, and internal structural frames) remain eligible for 100% bonus depreciation.+1

How to Apply This to Your Business

  1. Review Capital Budgets: Align your 2026 purchases with the new 100% thresholds.
  2. Cost Segregation: Combine 100% bonus depreciation with a cost segregation study to identify 5-, 7-, and 15-year assets hidden in your real estate.
  3. Consult the Experts: Tax laws are moving fast. Contact Nexus Tax Books for a comprehensive review of your asset schedule.

Nexus Tax Books (904) 385-0466 | info@nexustaxbooks.com www.nexustaxbooks.com

100% Bonus Depreciation is Back: What Your Business Needs to Know for 2026

By:

The “One Big Beautiful Bill” (OBBB) Act has officially restored 100% Bonus Depreciation…

Frequently Asked Questions

Does 100% bonus depreciation apply to used equipment?

Yes. Under the OBBB Act, as long as the used property was not previously used by the taxpayer, it qualifies for the 100% deduction.

What is the effective date for 100% bonus depreciation?

The 100% rate applies to qualified property acquired and placed in service after January 19, 2025.