IRS Tax News

Treasury, IRS issue guidance on the additional first year depreciation deduction amended as part of the One, Big, Beautiful Bill

IR-2026-06, Jan. 14, 2026

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued Notice 2026-11 PDF that provides taxpayers with guidance on the permanent 100% additional first year depreciation deduction for eligible depreciable property acquired after Jan. 19, 2025, provided by the One, Big, Beautiful Bill. The notice also provides guidance on certain qualified sound recording productions that the OBBB added as property that may be eligible for the additional first year depreciation deduction.

Generally, when taxpayers acquire property for business use, they must depreciate it over several years based on various depreciation schedules.

The notice also provides interim guidance to taxpayers that they may generally rely on the existing additional first year depreciation deduction regulations. The notice provides rules for determining whether depreciable property is eligible for the additional first year depreciation deduction and for determining the amount of such deduction allowable under the OBBB. In general, the OBBB provides a permanent 100‑percent additional first year depreciation deduction for qualified property acquired, or specified plants that are planted or grafted, after Jan. 19, 2025.

Elections related to the additional first year depreciation deduction

The notice also provides interim guidance on elections taxpayers can make for certain property to be eligible for the additional first year depreciation deduction. Under the OBBB, taxpayers may elect:

• To deduct 40-percent (60-percent for certain property having longer production periods or certain aircraft) instead of the 100-percent additional first year depreciation deduction for qualified property placed in service during the first tax year ending after Jan. 19, 2025,
• To deduct additional first year depreciation for one or more specified plants,
• To treat certain acquired or self-constructed components of larger self-constructed property as generally eligible for the additional first year depreciation deduction, and
• Not to deduct the additional first year depreciation for a qualified sound recording production.

Sound recording productions added by the OBBB

In addition, the notice provides interim guidance for qualified sound recording productions. In general, a qualified sound recording production:

• Is treated as acquired on the date principal recording commences,
• Is considered placed in service at the time of initial release or broadcast, and
• Qualifies for the additional first year depreciation deduction if the sound recording production commences in a taxable year ending after July 4, 2025.

For more information about tax provisions under the OBBB, see One, Big, Beautiful Bill Provisions on IRS.gov.