Article
Interim guidance issued to implement OBBBA bonus depreciation amendments
Feb. 16, 2026 · Authored by Kathleen Meade
On Jan. 14, 2026, the IRS issued interim guidance in Notice 2026-11 (the Notice) to apply favorable bonus depreciation amendments under the One Big Beautiful Bill Act (OBBBA), which permanently restored full expensing for certain qualified property. In the Notice, the IRS states that it intends to issue proposed regulations consistent with the Notice provisions. As anticipated, the preliminary guidelines align with existing bonus depreciation rules provided under the Tax Cuts and Jobs Act (TCJA), which should facilitate timely implementation of the new law in the upcoming 2025 tax filing season. Taxpayers may rely on the Notice prior to the date the proposed regulations are published in the Federal Register, provided the provisions are applied in their entirety for all eligible property acquired and placed in service during the timeframes specified in the guidance. See our recent article for more information.
This alert summarizes key provisions and implications of the Notice.
Special allowance for qualified production property - Unfortunately, the Notice does not provide guidance for taxpayers looking to implement the temporary and time sensitive amendment that permits full expensing for certain qualified production property under section168(n), such as factories. However, an IRS official speaking at an industry conference this week indicated that the IRS is “actively working” on this guidance, although no release date was provided. Baker Tilly is closely monitoring the situation and will provide updates as developments occur.
Takeaways
- The Notice provides welcome certainty that taxpayers may rely on the principles in the existing bonus depreciation rules to apply the OBBBA, including the “written binding contract” rules used to determine whether the acquisition date requirement in the OBBBA is satisfied (an important concern for taxpayers that made significant property additions near the OBBBA cutoff date of Jan. 20, 2025).
- The ability to rely on the interim guidance immediately is good news for taxpayers looking to maximize depreciation deductions in 2025, including those with disallowed interest deductions that may benefit from the depreciation addback under section 163(j) that was restored under the OBBBA.
Related sections
Corporate alternative minimum tax: IRS issues initial guidance
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