168 Allowance % Field
Use the 168 Allowance % field in Asset Detail to select a 168 Allowance percent that is valid for U.S. Federal tax purposes. Refer to the table below for Bonus Depreciation percentages applicable to years 2017 and later.
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.
The One Big Beautiful Bill Act (OBBBA) of 2025
Effective January 20, 2025, assets placed in service on or after this date require the 168 Allowance of 100%. The system will automatically apply this percentage to new assets. For existing assets, perform a 168 Allowance Switch to apply the 100% bonus.
Exceptions to the 100% rate for assets placed in service after 1/19/2025:
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40% election: For property placed in service between 1/20/2025 and 12/31/2025.
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50% election For Reuse and Recycling property (unchanged from previous law)
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60% election: For Longer Production Period (LPP) and Certain Aircraft (NCA) property placed in service between 1/20/2025 and 12/31/2025.
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Qualified Production Property (QPP): Must be placed in service by 12/31/2028. (See Note 3 below the chart.)
See below for details:
| Placed in Service Year | Bonus Depreciation Percentage | |
| Qualified Property in General/Specific Plants | Longer Production Period (LPP) and Certain Aircraft (NCA) | |
| Portion of Basis of Qualified Property Acquired after 01/19/2025 [OBBBA] | ||
| 1/20/2025 and thereafter | 100 percent1 | 100 percent2 |
| 1/20/2025 – 12/31/2028 | 100 percent | Qualified Production Property3 |
| Portion of Basis of Qualified Property Acquired before 9/28/2017 [PATH Act] | ||
| 9/28/2017 – 12/31/2017 | 50 percent | 50 percent |
| 2018 | 40 percent | 50 percent |
| 2019 | 30 percent | 40 percent |
| 2020 | None | 30 percent |
| 2021 and thereafter | None | None |
| Portion of Basis of Qualified Property Acquired after 9/27/2017 [TCJA] | ||
| 9/28/2017 – 12/31/2022 | 100 percent | 100 percent |
| 2023 | 80 percent | 100 percent |
| 2024 | 60 percent | 80 percent |
| 2025 | 40 percent | 60 percent |
| 2026 | 20 percent | 40 percent |
| 2027 | None | 20 Percent |
| 2028 and thereafter | None | None |
Note 1: 40% may be elected in place of 100% for 2025.
Note 2: 60% may be elected in place of 100% for 2025.
Note 3: 100% Allowance is available for Qualified Production Property constructed between 1/20/2025 and 12/31/2028 and placed in service by 12/31/2030.
The 168 Allowance % field is enabled after you select a "Plus 168" depreciation method of MA, MR, AA, or SB. The calculated amount of the allowance also displays in the 168 Allowance Amount field.
Allowance % Field Defaults:
When a 168 Plus depreciation method is selected, the Allowance % field automatically displays the default allowable bonus percentage for the year the asset is placed in service. Other options are available by selecting from the field dropdown menu.
- 50 for property placed in service after 5/5/2003 and before 9/28/2017
- 100 for property placed in service between 9/28/2017 and 12/31/2022
- 80 for property placed in service in 2023
- 60 for property placed in service in 2024
- 40 for property placed in service between 1/1/2025 and 1/19/2025
- 100 for property placed in service on or after 1/20/2025
Other 168 Allowance Information
The Protecting Americans from Tax Hikes (PATH) Act of 2015 extended the 168 Allowance for qualified property into future years. Additionally, the 168 Allowance for second generation biofuel property was extended through 2020.
The Tax Cuts and Jobs Act (TCJA) of 2017 increased the 168 Allowance to 100% for qualifying assets placed in service after 9/27/2017 through 12/31/2022 (12/31/2023 for longer production period assets and certain aircraft) with declining 168 Allowance amounts for years 2023 through 2026.
Certain transition rules applied to assets acquired before 9/28/2017 and placed in service after 9/27/2017 and for taxpayers who opted to apply an allowance of 50% instead of 100% in their first taxable year ending after 9/27/2017.
After 12/31/2022, the 168 Allowance decreases by 20% each year until 12/31/2026. After 12/31/2026, the 168 Allowance is 0% except for reuse and recycling property which has an ongoing 168 Allowance of 50%.