100% bonus depreciation is back: what the 2025 law means when you buy equipment

What it says#

Public Law 119-21, signed July 4, 2025, amended section 168(k) of the tax code so that the additional first-year depreciation deduction, the one everyone calls bonus depreciation, is 100% again and stays there. It applies to qualified property acquired and placed in service after January 19, 2025. The law removed the old sunset that required property to be in service before 2027.

That reverses a schedule most owners had already priced in. Under the 2017 Tax Cuts and Jobs Act the deduction was 100% for property placed in service from September 28, 2017 through 2022, then dropped 20 points a year: 80% in 2023, 60% in 2024, 40% in 2025, with 20% in 2026 and nothing after that. The IRS notice states the 2025 figure plainly: 40% for qualified property placed in service during 2025, or 60% for certain longer-production property and aircraft.

Two details from the notice matter in a practice. First, timing is about acquisition: the law says property is not treated as acquired after January 19, 2025 if a written binding contract for it was signed before then. Second, there is a transition election. For qualified property placed in service during the first tax year ending after January 19, 2025, a taxpayer may elect 40% (or 60% for the longer-production category) instead of 100%. Until new regulations are issued, taxpayers may generally rely on the existing bonus depreciation regulations, and the notice explains how the various elections are made.

Section 179 is a different deduction with its own numbers, and Publication 946 for 2025 gives them: a maximum of $2,500,000, reduced by the amount by which the cost of section 179 property placed in service in the year exceeds $4,000,000, with a $31,300 cap for sport utility vehicles placed in service in tax years beginning in 2025.

Who it applies to#

Any practice that buys qualified property: the equipment, furniture, technology and similar assets a dental office puts into service. The rule is federal; states decide separately whether to follow it, which is one more reason the final answer comes from your CPA, not from this page.

The written-binding-contract point is the one to check. An owner who signed for a CBCT unit in December 2024 and took delivery in March 2025 is in different territory from one who signed in February 2025. The date on the contract, not the invoice, is what the law looks at.

The 40% election exists for a reason. A year with low taxable income may not want a 100% deduction it cannot use; the election lets the deduction spread. Which way is better is arithmetic on your own return.

What changed#

Before July 2025, the plan was a shrinking deduction: 40% in 2025, 20% in 2026, zero from 2027. That shaped how practices timed purchases and how lenders wrote proposals. The new law made 100% the permanent rate for anything acquired after January 19, 2025, and the IRS's January 2026 notice is the first guidance on how to apply it, pending proposed regulations.

The mechanics of what qualifies did not change, and neither did the other paths to the same deduction. Section 179 still exists with its own limits, and regular depreciation over the asset's recovery period is still the default when neither applies or neither is elected.

Where the source is#

The IRS news release of January 14, 2026 announces Notice 2026-11 and summarizes the change; the notice itself, a PDF, holds the detail on elections and the transition rule. Publication 946 for 2025 is the plain-language reference for what qualifies and the Section 179 limits, and the govinfo record is the law: Public Law 119-21, section 70301.