Is Section 179 Going Away in 2026 and How Is It Calculated?

‍No, Section 179 is not going away. It has been a permanent part of the Internal Revenue Code since the PATH Act of 2015 removed its expiration date, and the One Big Beautiful Bill Act raised its limits rather than reducing them. For tax years beginning in 2026, the Section 179 deduction limit is $2,560,000, the phase-out begins at $4,090,000 of total qualifying property placed in service, and the deduction reaches zero at $6,650,000, per Revenue Procedure 2025-32. The provision that was genuinely scheduled to disappear was bonus depreciation, which the Tax Cuts and Jobs Act had set on a schedule declining to zero after 2026. That schedule was reversed. Bonus depreciation now sits permanently at 100% for qualifying property acquired after January 19, 2025.

The sections below cover why a permanent provision still generates expiration questions every year, what actually happened to bonus depreciation and where its rate stands now, which of the two provisions is permanent, what changed for Section 179 this year, the full limit history from 2017 forward, the four depreciation changes the One Big Beautiful Bill Act made, the entirely new expensing provision it created for production facilities, why Section 179 and Section 179D get confused, how states treat all of this, what can still change in future years, and what the stability means for how businesses should time capital purchases now.

Key Takeaways

• Section 179 is permanent. The PATH Act of 2015 removed the expiration date that had forced Congress to renew the provision nearly every year before that.
• The 2026 limit is $2,560,000, with the phase-out running from $4,090,000 to $6,650,000 of total qualifying property placed in service.
• Bonus depreciation was the provision scheduled to disappear. Under the Tax Cuts and Jobs Act it dropped to 80% in 2023, 60% in 2024, 40% in 2025, and would have reached zero after 2026.
• The One Big Beautiful Bill Act, signed July 4, 2025, permanently restored bonus depreciation to 100% for qualifying property acquired after January 19, 2025.
• Both provisions are now permanent, which has not been true at the same time in two decades.
• The same legislation raised the Section 179 baseline from $1,000,000 to $2,500,000 and created an entirely new provision, IRC Section 168(n), for qualified production property.
• Section 179 and Section 179D are different provisions. Section 179D is the energy-efficient commercial buildings deduction and has no relationship to equipment expensing.
• Permanence is federal only. Several states decouple from bonus depreciation and cap Section 179 independently, and that divergence is unaffected by federal law.
• The limits still change every year through inflation indexing, which is a different thing from the provision expiring.

Is Section 179 Going Away?

Section 179 is not going away, because the provision carries no expiration date and its dollar limits were increased rather than reduced by the most recent major tax legislation. The deduction has existed since 1958. Its current form has no sunset clause, no scheduled step-down, and no pending repeal, which puts it in a different category from the temporary provisions that expire and get renewed on rolling deadlines.

Permanence at the statutory level does not mean the numbers hold still. The deduction limit and the spending phase-out are both indexed for inflation and republished by the IRS in an annual revenue procedure, which means the figures change every January while the provision underneath them does not. A business owner watching the limit move from $1,220,000 to $2,500,000 to $2,560,000 across three years is watching indexation and legislation, not an expiration countdown.

The distinction matters because it changes how capital purchases get timed. A provision with a deadline creates pressure to buy before the deadline. A permanent provision lets the purchase be timed against the business's own income, cash position, and operational need instead. That shift is the single largest practical consequence of the current law for tax planning, and it removes an artificial urgency that shaped equipment buying for most of the past decade.

Why Do People Think Section 179 Is Ending?

People think Section 179 is ending because it genuinely was temporary for most of its modern history, and because the provision most often discussed alongside it really was scheduled to disappear. Two separate sources of confusion feed the same question, and both have legitimate roots.

The first source is the extenders era. For roughly fifteen years before 2016, the Section 179 limit was set by temporary legislation that Congress renewed in short increments, often retroactively and often late in the year. The limit swung between $25,000 and $500,000 depending on which bill had most recently passed, and businesses spent Decembers waiting to learn what the current year's figure would be. The PATH Act of 2015 ended that cycle by making the $500,000 limit permanent and indexing it for inflation. Business owners who lived through the extenders years learned to ask whether the deduction still existed, and the habit outlasted the reason for it.

The second source is bonus depreciation, which is a distinct provision under IRC Section 168(k) that gets discussed in the same breath as Section 179 because both accelerate first-year deductions on the same kinds of property. Bonus depreciation was on a real countdown. Articles warning that a major depreciation benefit was phasing out were accurate about bonus depreciation and were widely read as warnings about Section 179. Separating the two provisions is the first step toward answering the question correctly.

Is Bonus Depreciation Going Away?

Bonus depreciation is not going away either, though it came close, and its rate was actively declining for three years before Congress reversed the schedule. The Tax Cuts and Jobs Act set bonus depreciation at 100% for property placed in service from late 2017 through 2022, then wrote a step-down into the statute: 80% for 2023, 60% for 2024, 40% for 2025, 20% for 2026, and zero thereafter.

Two of those steps actually happened. Businesses placing equipment in service in 2023 received 80%, and businesses placing equipment in service in 2024 received 60%. The 40% rate applied briefly to property acquired in early 2025. Guidance written during that window, which is still widely circulating and still ranks well in search results, describes the decline as inevitable and advises businesses to accelerate purchases ahead of it. That advice was sound when written and is now obsolete.

The reversal came through the One Big Beautiful Bill Act, which Congress passed and the President signed on July 4, 2025. Section 70401 of that act permanently restored the 100% rate for qualifying property acquired after January 19, 2025, and removed the step-down schedule entirely. The Treasury Department and the IRS issued interim guidance on the restored provision in Notice 2026-11 on January 14, 2026, which taxpayers may rely on until proposed regulations are finalized.

Is Bonus Depreciation Still 100% in 2026?

Bonus depreciation is 100% in 2026 and carries no scheduled reduction in any future year. The rate applies to qualifying property with a MACRS recovery period of 20 years or less, acquired after January 19, 2025 from an unrelated party, and placed in service during the tax year. New and used property both qualify, since the Tax Cuts and Jobs Act removed the original-use requirement for property acquired after September 27, 2017.

Bonus depreciation carries no dollar cap, no spending phase-out, and no business income limitation, which distinguishes it sharply from Section 179 on every constraint that matters. It applies automatically unless the taxpayer affirmatively elects out, and the election out covers an entire MACRS asset class for the year rather than a single asset. Those mechanics did not change with the restoration. What changed is that the rate no longer erodes while a business decides.

Which Is Permanent, Section 179 or Bonus Depreciation?

Both Section 179 and bonus depreciation are permanent as of the One Big Beautiful Bill Act, which is a condition that has not held simultaneously in roughly twenty years. Section 179 became permanent through the PATH Act in 2015. Bonus depreciation became permanent through the OBBBA in 2025. Neither now carries a sunset date, a step-down schedule, or a scheduled renewal vote.

Permanent in this context means the statute contains no expiration provision. It does not mean the rules are beyond amendment, since any future Congress can change any provision of the code. What permanence removes is the automatic reversion that temporary provisions carry, where inaction alone causes the benefit to lapse. Both provisions now require affirmative legislation to change, which is a materially different planning environment from the one businesses navigated between 2002 and 2015.

What Changed for Section 179 in 2026?

The Section 179 changes for 2026 are inflation adjustments to figures that the One Big Beautiful Bill Act reset the year before: the deduction limit rose to $2,560,000, the phase-out threshold rose to $4,090,000, and the complete phase-out point rose to $6,650,000. Revenue Procedure 2025-32 published those amounts, applying the annual indexing in IRC Section 179(b)(6) to the new baseline.

The larger change happened in 2025 rather than 2026. Section 70301 of the OBBBA raised the Section 179 baseline from $1,000,000 to $2,500,000 and the phase-out threshold from $2,500,000 to $4,000,000, effective for property placed in service after December 31, 2024. Without that legislation, the indexed 2025 figures would have been roughly $1,250,000 and $3,130,000. The doubling put the ceiling well above what most small and mid-sized businesses will ever reach in a single year, which means the practical constraint on a Section 179 election is now almost always the business income limitation rather than the dollar cap. That shift matters most for businesses buying used equipment at volume, where total spending previously bumped against the phase-out sooner than expected.

Vehicle-specific figures moved with the same revenue procedure. The heavy SUV cap for vehicles rated between 6,001 and 14,000 pounds gross vehicle weight stands at $32,000 for 2026, and the Section 280F first-year ceiling for passenger automobiles stands at $20,300 with bonus depreciation or $12,300 without, per Revenue Procedure 2026-15. Those caps sit underneath the general limit and bind long before it does, which is why deductions on business vehicles follow a different arithmetic than deductions on equipment.

What Is the Section 179 Limit by Year?

The Section 179 limit has risen every year since 2017, from $510,000 to $2,560,000, with two legislative step-changes and seven years of inflation indexing in between. The table below sets the deduction limit, the spending phase-out threshold, and the bonus depreciation rate side by side, so the two provisions can be read against each other across the same period. This is the view that makes the confusion disappear, because the Section 179 column climbs steadily while the bonus column falls and then recovers.

Tax YearSection 179 LimitPhase-Out BeginsBonus RateGoverning Change2017$510,000$2,030,00050%, then 100% late in the yearPATH Act indexing; TCJA enacted in December2018$1,000,000$2,500,000100%Tax Cuts and Jobs Act2019$1,020,000$2,550,000100%Inflation indexing2020$1,040,000$2,590,000100%Inflation indexing2021$1,050,000$2,620,000100%Inflation indexing2022$1,080,000$2,700,000100%Final year before the TCJA step-down2023$1,160,000$2,890,00080%TCJA bonus step-down begins2024$1,220,000$3,050,00060%TCJA bonus step-down continues2025$2,500,000$4,000,00040%, then 100% after January 19One Big Beautiful Bill Act2026$2,560,000$4,090,000100%Rev. Proc. 2025-32 indexing

Two patterns stand out in that history. The Section 179 limit never fell in any year, even during the period when guidance across the internet warned that a major deduction was disappearing. The bonus depreciation rate fell for three consecutive years and then recovered to its previous ceiling. A reader who conflated the two columns would have concluded that Section 179 was eroding, which is precisely the misreading that keeps this question in circulation. Reading them as separate provisions is the sort of distinction that shapes a capital business consulting conversation more than any single year's figure does.

What Did the One Big Beautiful Bill Act Change About Depreciation?

The One Big Beautiful Bill Act made four depreciation changes: it permanently restored 100% bonus depreciation, it more than doubled the Section 179 limit and phase-out threshold, it created a new 100% expensing provision for production facilities, and it permanently restored the bonus election for specified agricultural plants. All four took effect through the same statute, signed July 4, 2025 as Public Law 119-21.

• Permanent 100% bonus depreciation, Section 70401. Restores the rate under IRC Section 168(k) for qualifying property acquired after January 19, 2025, and removes the step-down schedule the Tax Cuts and Jobs Act had written into the statute.
• Expanded Section 179 limits, Section 70301. Raises the baseline deduction limit from $1,000,000 to $2,500,000 and the phase-out threshold from $2,500,000 to $4,000,000, effective for property placed in service after December 31, 2024, with annual inflation indexing continuing from there.
• New qualified production property expensing, Section 70307. Adds IRC Section 168(n), permitting a 100% special depreciation allowance on certain domestic nonresidential real property used in manufacturing, production, or refining, which otherwise depreciates over 39 years.
• Permanent specified plant election. Retains the ability of a farming business to elect bonus depreciation in the year a specified plant is planted or grafted rather than in the year it is placed in service.

The Section 179 and bonus changes affect nearly every business that buys equipment. The Section 168(n) provision affects a narrower set of taxpayers but delivers far more per taxpayer, since it reaches real property that no prior provision could accelerate. Businesses that previously relied on reclassifying building components through a study to shorten recovery periods now have a second route for certain facilities, and the 2025 rule change altered which route produces the better result.