An immediate deduction for the full cost of qualifying equipment and other short-lived property in the year it is placed in service. Restored to 100 percent for property acquired after January 19, 2025, and made permanent.
Section 179 is an election with a dollar cap ($2.5 million for 2025, indexed) and an income limit. Bonus has no dollar cap and no income limit but applies to a defined class of property. Section 179 is taken first, then bonus on the rest.
Bonus depreciation can create a loss, unlike section 179, which is capped at business income. Illinois does not follow federal bonus depreciation and requires an addback, so the state return diverges.
Bonus applies automatically to eligible property and can produce a loss; section 179 is elective, asset by asset, and limited to income. Many businesses use both.
Source: IRC 168(k) as amended by Public Law 119-21
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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