Rates last updated: August 2026, from Rev. Proc. 2026-15. Bizora refreshes this page each time the IRS publishes new limits, typically in late February or early March.
A client buys a $55,000 pickup truck for the business in March 2026. How much can they actually deduct in Year 1? Not the truck's cost, and not even the full bonus depreciation percentage: it's whichever is lower, the computed depreciation or the Section 280F cap, currently $20,300.
These limits change every year, and the rule that determines which bonus percentage applies changed substantially in 2025. This page covers the current 2026 caps, the three-year trend, and what actually governs the calculation now.
Source: Rev. Proc. 2026-15, effective for passenger automobiles (including trucks and vans) placed in service during calendar year 2026.
Which table applies depends on whether any Section 168(k) bonus depreciation is claimed on the vehicle at all, not on the exact percentage. Rev. Proc. 2026-15 states this explicitly: the Table 1 ceiling applies "regardless of whether the § 168(k) additional first year depreciation deduction is allowed under former § 168(k) or § 168(k) as amended by the OBBBA." Use Table 2 only if no bonus depreciation applies: business use of 50% or less, an election out of bonus depreciation under § 168(k)(7), a used vehicle that doesn't meet the acquisition requirements, or a vehicle acquired before September 28, 2017.
All four 2025 caps dropped from 2024, driven by the automobile-price-inflation-adjustment formula under IRC § 280F(d)(7). That decline reversed in 2026: every cap moved back up, with Years 2 through 4+ landing exactly where they were in 2024, though Year 1 didn't fully recover.
The 2026 bonus-depreciation cap of $20,300 is still $100 below 2024's $20,400. If you're working from an older post that reported the 2025 decrease, this table replaces it going forward.
Before mid-2025, Section 168(k) bonus depreciation was in the middle of the Tax Cuts and Jobs Act's scheduled phase-down: 100% through 2022, then declining 20 points a year toward zero by 2027. Under that old schedule, a vehicle placed in service in 2025 would have gotten 40% bonus depreciation, dropping to 20% in 2026 and 0% in 2027.
That phase-down no longer applies to most new vehicle purchases. The One Big Beautiful Bill Act (Public Law 119-21), signed July 4, 2025, restored 100% bonus depreciation under current law for property both acquired and placed in service after January 19, 2025. For a vehicle bought and put into business use today, the applicable percentage is 100%, not a number sliding toward zero.
The old phase-down schedule survives only as a narrow legacy rule. Property acquired before January 20, 2025, but not placed in service until later, still follows the former schedule, which sits at 20% for property placed in service in 2026. This mostly affects vehicles ordered or under binding contract before the OBBBA cutoff but delivered afterward.
Taxpayers also had the option to elect a reduced 40% rate instead of 100% for their first taxable year ending after January 19, 2025 (for calendar-year taxpayers, tax year 2025). This was a one-time transitional election under § 168(k)(10) that does not carry forward as an ongoing choice into 2026. The IRS addressed the transition mechanics in Notice 2026-11 (2026-6 I.R.B. 491).
Here's the part that surprises people: none of this changes the dollar cap itself. Whether a vehicle qualifies for the new 100% rate or the old 20% legacy rate, the same $20,300 Year 1 ceiling applies as long as some amount of bonus depreciation is claimed. The computed bonus amount on almost any vehicle purchase will exceed $20,300 either way, so the practical answer to "which rate applies" rarely changes which table you use.
The difference between the two Year 1 figures, $20,300 with bonus and $12,300 without, is exactly $8,000. This comes from IRC § 168(k)(2)(F)(i), which provides a fixed $8,000 increase to the first-year cap when bonus depreciation applies.
That $8,000 bump is statutory, not inflation-adjusted, and it hasn't moved in years. It stays at $8,000 regardless of whether the applicable bonus percentage is 100%, 40%, or 20%. It's the $8,000 add-on, not the bonus rate itself, that drives the entire gap between the two tables.
When a taxpayer leases rather than purchases a passenger automobile, Section 280F(c)(2) and (c)(3) require an income inclusion to offset the absence of depreciation limits on the lessor's side. The computation follows Treas. Reg. § 1.280F-7(a).
For lease terms beginning in calendar year 2026, Table 3 of Rev. Proc. 2026-15 applies to vehicles with FMV exceeding $62,000, the same threshold as 2025. The table provides annual inclusion amounts based on the vehicle's fair market value at the start of the lease term, and those amounts increase with both the vehicle's value and each successive year of the lease.
Practitioners advising on lease-versus-buy decisions should factor in both the depreciation caps for purchased vehicles and the lease inclusion amounts for leased ones. The after-tax cost comparison depends on the client's specific circumstances, including business-use percentage and marginal rate.
The Section 280F limits create a few recurring compliance and planning considerations.
Placed-in-service date: The caps apply based on when the vehicle is placed in service, not when it is purchased or titled. Document the actual date the vehicle was ready and available for use in the business, since that date determines both the applicable year's caps and, for vehicles acquired near the OBBBA cutoff, which bonus depreciation rule applies.
Business-use percentage: Section 280F limits apply to the business-use portion only. If business use falls to 50% or below, recapture rules under § 280F(b)(2) apply, and bonus depreciation isn't available at all for that vehicle (Table 2 governs instead).
GVWR classification: Under IRC § 280F(d)(5)(A), a passenger automobile is any four-wheeled vehicle manufactured primarily for use on public streets, roads, and highways, rated at 6,000 pounds unloaded gross vehicle weight or less. For trucks and vans, the 6,000-pound test applies to gross vehicle weight rating rather than unloaded weight. Vehicles rated above 6,000 pounds fall outside the Section 280F caps entirely.
State conformity: State depreciation rules vary. Some states decouple from federal bonus depreciation or impose separate limits. Don't assume the federal Section 280F amounts apply at the state level without verifying current conformity.
For most vehicle purchases, the Section 280F cap does the real work. A $55,000 truck at 100% bonus depreciation computes to $55,000 in Year 1 before any cap applies, but the deduction is still limited to $20,300. The bonus percentage matters for property that isn't subject to the passenger-auto caps at all, like heavy SUVs and trucks over 6,000 pounds GVWR, but for a standard passenger vehicle, the cap is the number that actually governs the return.
If you're drafting a memo on a vehicle acquisition or lease-versus-buy analysis, Bizora traces each of these figures back to the governing revenue procedure, with the citation and reasoning path visible through View Steps, so the number in the memo and the number in the table stay in sync as the IRS publishes new limits each year.
For passenger automobiles placed in service during calendar year 2026, the Section 280F limits are: Year 1 with bonus depreciation, $20,300; Year 1 without bonus depreciation, $12,300; Year 2, $19,800; Year 3, $11,900; Year 4 and each succeeding year, $7,160. These figures come from Tables 1 and 2 of Rev. Proc. 2026-15.
The $8,000 difference between the two Year 1 caps, $20,300 versus $12,300, comes from IRC § 168(k)(2)(F)(i). This provision adds a fixed $8,000 to the first-year depreciation cap whenever bonus depreciation applies to the vehicle. The $8,000 amount is statutory and doesn't change based on the applicable bonus percentage.
They went up from 2025, reversing the prior year's decrease. Year 1 with bonus rose from $20,200 to $20,300; Year 1 without bonus rose from $12,200 to $12,300; Year 2 rose from $19,600 to $19,800; Year 3 rose from $11,800 to $11,900; Year 4+ rose from $7,060 to $7,160. Years 2 through 4+ are now back at their 2024 levels; Year 1 remains $100 below 2024.
For a vehicle both acquired and placed in service after January 19, 2025, bonus depreciation is 100% under current law per the One Big Beautiful Bill Act. This replaced the prior scheduled phase-down (which would have been 40% in 2025 and 20% in 2026). A narrow legacy rule still applies a declining percentage, currently 20% for 2026, to property acquired before January 20, 2025 but placed in service later.
No. The Table 1 cap ($20,300 for 2026) applies whenever any bonus depreciation is claimed on the vehicle, whether the rate is 100% or a lower legacy percentage. Table 2 applies only when no bonus depreciation is claimed at all, such as when business use is 50% or less or the taxpayer elects out of bonus depreciation.
Yes. The Section 280F depreciation limits apply to passenger automobiles, which includes trucks and vans, provided the vehicle is rated at 6,000 pounds gross vehicle weight or less. Trucks and vans above that weight rating fall outside the Section 280F caps entirely.
For lease terms beginning in calendar year 2026, Table 3 of Rev. Proc. 2026-15 applies to vehicles with FMV exceeding $62,000, unchanged from the 2025 threshold. Taxpayers leasing vehicles above this value must include an amount in gross income each year of the lease, calculated under Treas. Reg. § 1.280F-7(a).
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