Changing to the 168 Allowance

See 168 Allowance % field for legislative changes that outline the percentages available for the applicable periods.

The 168 Allowance is taken by all qualifying assets, unless you elect out of the allowance. You can elect out of the allowance for each class of assets (that is, 3-year property, 5-year property, 7-year property, etc.) on a year-to-year basis. If an asset qualifies but is not currently taking the allowance, you can change the method to take the allowance.

Note: The 168 Extra feature allows you to use a 168 Allowance % not valid for federal purposes for assets placed in service in years 2023 and later.

You change to the 168 Allowance by choosing a depreciation method especially designed to calculate and claim the allowance. Therefore, you change to the allowance when you save the asset using a "Plus 168" depreciation method.

To change to the 168 Allowance

1. In Asset Detail, select a "Plus 168" depreciation method (that is, depreciation method MA, MR, AA, or SB).
2. After selecting the method, select 20, 30, 40, 50, 60, 80, or 100 in the 168 Allowance % field. The calculated amount of the allowance appears in the 168 Allowance Amount field.

Note: The availability of a specific percentage in the 168 Allowance % field depends on when the property was placed in service. In certain situations, assets acquired before 9/28/2017 and placed in service after 9/27/2017 will have a different allowance percentage than the default percentage allowed for the year of the placed in service date.

3. Select the Save Asset button to save the asset.

Note: You can also select the 168 Allowance for a group of assets by performing a 168 Allowance Switch.