Notice 2026-11 (OBBBA Bonus Guidance)

The facts

IRS notice released in January 2026. OBBBA (Public Law 119-21, enacted July 4, 2025) made 100 percent bonus depreciation permanent for qualified property acquired after January 19, 2025, but the existing regulations still reflect the old TCJA rules.

What it holds

Interim guidance: taxpayers apply rules consistent with Treas. Reg. 1.168(k)-2 and 1.1502-68, substituting January 19, 2025 for September 27, 2017 (and January 20, 2025 for September 28, 2017) each place they appear, and 100 percent for the applicable percentage. It also covers the section 168(k)(5) election, the amended 40-percent (60-percent for long-production property) 168(k)(10) election, the component election, and qualified sound recording productions. Taxpayers may rely on it until forthcoming proposed regulations are published.

Background

OBBBA, Public Law 119-21, was enacted July 4, 2025. Among its depreciation changes, it made 100 percent bonus depreciation permanent for qualified property acquired after January 19, 2025, replacing the phase-down schedule that had been winding bonus toward zero.

That created a gap. The existing bonus regulations, Reg. 1.168(k)-2 and the consolidated-group rule at 1.1502-68, still describe the 2017 framework: September 27, 2017 acquisition dates and the old applicable percentages. Taxpayers needed to know how to apply settled regulatory tests to the new statute. The IRS released this notice in January 2026 to answer that.

What it established

The core instruction, in sections 3.02 and 3.03, is a substitution rule. Taxpayers apply rules consistent with the existing regulations, but with two swaps: read January 19, 2025 in place of September 27, 2017, and January 20, 2025 in place of September 28, 2017, each place those dates appear; and read 100 percent in place of the applicable percentage.

The notice also handles the elections around the new rate: the section 168(k)(5) election for specified plants, the section 168(k)(10) election as amended, now a 40 percent rate (60 percent for longer production period property), the component election, and rules for qualified sound recording productions. Section 6 contains the reliance rule: taxpayers may rely on the notice until forthcoming proposed regulations are published.

How it shows up in a study

This notice is the bridge authority cited in every 100 percent bonus conclusion for property acquired after January 19, 2025. The study's bonus section pairs two things: the acquisition-date tests from Reg. 1.168(k)-2 (binding contract date, physical work, the more-than-10-percent safe harbor) and this notice's date substitutions that make those tests speak in OBBBA terms.

Practically, the documentation file holds the purchase contract or construction cost evidence proving acquisition after January 19, 2025, with the notice cited right next to it. That combination is what supports deducting the entire short-life and QIP basis in year one.

What it does not mean

The notice does not change what counts as qualified property. All the other section 168(k) requirements still have to be met, including the exclusion of mandatory-ADS property. It only retrofits the dates and the rate.

It also does not give 100 percent bonus to property acquired on or before January 19, 2025. Those acquisitions stay under the prior-law rates for their dates. And it is interim guidance by its own terms: proposed regulations are coming, and conclusions should be revisited when they arrive. As of June 9, 2026, the notice remains the operative guidance.

Category

Bonus depreciation & expensing

Applies to

All property types

Status

Vetted

This page explains a tax authority in plain words. It is not tax advice for your situation. The way this authority applies to your property is reviewed by a licensed tax professional. Citation is provided so you or your advisor can read the primary source.