Permanent 100% Bonus Depreciation: Cary/RTP Small Businesses Buying Equipment After ~January 19, 2025

Author: Gloria Liu, CPA ｜ YCL Tax, Accounting & Advisory

Bottom line in one sentence

If you own a small business in Cary / Research Triangle Park (RTP) and plan to buy machinery, qualifying vehicles, computers, or other eligible assets before year-end: the One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, permanently restored 100% additional first-year depreciation under IRC §168(k) for qualified property acquired after about January 19, 2025 and placed in service under the statute’s rules. Now is the window to confirm contract dates, placed-in-service timing, and how §179 and North Carolina rules interact—especially for purchases that still need to be in service before the 2026 calendar year closes.

News background

The Tax Cuts and Jobs Act (TCJA) had phased bonus depreciation down: under the old schedule, qualified property placed in service in 2025 generally received only 40% (or 60% for certain longer-production-period property and certain aircraft), heading toward zero in later years. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) amended §168(k) through §70301: it removed the general placed-in-service sunset and replaced the phasedown with a permanent 100% additional first-year depreciation deduction for qualified property acquired after January 19, 2025. Treasury and the IRS issued Notice 2026-11 (IR-2026-06, January 2026) as interim guidance taxpayers may generally rely on. The same Act also added §168(n) for “qualified production property” (QPP)—an elective 100% special allowance for certain production-related nonresidential real property. That QPP regime is temporary and is not the same rule as permanent equipment-focused §168(k).

Old vs. new rules

1. Rate: Old (TCJA phasedown)—generally 40% for property placed in service in 2025; New—permanent 100% for qualified property acquired after January 19, 2025 (§168(k); OBBBA §70301).

2. Sunset: Old rules required most property to be placed in service before mid-decade cutoffs; New rules remove that general sunset for post–January 19, 2025 acquisitions.

3. Acquisition date vs. placed-in-service date: Acquisition date is critical. In practice, acquisition is often fixed by the date of a written binding contract. Property under a binding contract entered into on or before January 19, 2025 may still fall under the prior phasedown rates (e.g., 40% for 2025) even if delivery and placed-in-service occur later.

4. Transition election: For qualified property placed in service in the first tax year ending after January 19, 2025, taxpayers may elect 40% (or 60% for certain longer-production-period property / certain aircraft) instead of 100% (Notice 2026-11)—useful when modeling income, NOLs, or other limitations.

5. Eligible property (overview): Broadly consistent with prior §168(k)—most tangible property with a recovery period of 20 years or less, certain software, qualified improvement property (QIP), and qualifying used property that meets acquisition and use tests. Eligibility is always fact-specific.

6. §168(n) QPP (verified in OBBBA / P.L. 119-21): Elective 100% special depreciation for the portion of nonresidential real property used as an integral part of a qualified production activity (temporary): construction must begin after January 19, 2025 and before January 1, 2029, and the property must be placed in service before January 1, 2031; offices, sales areas, and similar nonproduction portions are generally excluded; a change in use can trigger roughly 10-year recapture. Most Cary/RTP retail and service businesses buying equipment will focus on §168(k) / §179, not QPP.

7. §179 (companion tool): OBBBA raises the annual §179 limit to about $2.5 million and the phaseout threshold to about $4 million for tax years beginning after 2024 (with later inflation indexing)—still useful where state conformity favors §179 or for certain improvements that do not qualify for bonus.

8. North Carolina: NC has historically decoupled from full federal bonus depreciation and used state-specific acceleration. Whether 2025–2026 NC returns automatically follow federal 100% is 待核 / not assumed—do not treat state and federal results as identical.

Self-check checklist

1. You are a C corp, S corp, partnership, or sole proprietor in Cary / RTP / Raleigh / Wake County planning to acquire and place in service machinery, equipment, qualifying vehicles, or computers before December 31, 2026.

2. Your purchase contract is (or will be) dated after January 19, 2025, and you need to confirm you are in the 100% window.

3. You signed a binding contract on or before January 19, 2025, with delayed delivery—you may still be on the old 40% track and should document the contract date carefully.

4. You are comparing §179 vs. bonus depreciation, or your North Carolina (or other state) addback / depreciation differs from federal.

5. You manufacture or plan a U.S. production facility and want a preliminary read on temporary §168(n) QPP (most pure service/retail equipment buyers will not need this path).

Simplified example (illustrative only; state tax, interest limits, and NOL caps omitted)

Assume a Cary calendar-year manufacturer-support business acquires a new qualifying machine for $100,000 under a contract dated March 2025, places it in service the same year, meets all §168(k) tests, and does not elect a lower percentage:

1. Under permanent 100% bonus: Federally, roughly $100,000 of additional first-year depreciation may apply in the placed-in-service year (illustrative), with basis reduced accordingly for later regular depreciation.

2. If the same machine was actually subject to a binding contract signed January 10, 2025: the acquisition date may be treated as earlier, so the federal rate may remain near the old 40% schedule (about $40,000 illustrative), with the remainder recovered under MACRS—contract-date review matters.

3. If taxable income is thin or you prefer spreading deductions: evaluate the first-year 40% election, electing out by class, or pairing with §179. The better path depends on income trajectory, North Carolina treatment, and financing—there is no one-size-fits-all answer.

Action timeline

1. Now through December 31, 2026: Inventory planned CapEx; document written contract dates, delivery, and placed-in-service evidence; leave time for installation so year-end purchases are actually in service.

2. Before signing large orders: Distinguish nonbinding quotes from binding contracts; align with your CPA on acquisition-date impact for long-lead items.

3. 2025 / 2026 federal filing seasons: Support Form 4562 under Notice 2026-11; timely make any transition 40%/60% election or class-by-class opt-out.

4. State tax in parallel: Separately confirm North Carolina (and other states) conformity or decoupling for §168(k), §179, and §168(n)—do not assume NC mirrors federal 100%.

5. Production facility owners: If exploring §168(n) QPP, map construction-begin and placed-in-service deadlines, production-use segregation, election mechanics, and recapture risk; IRS Notice 2026-16 is current interim guidance.

How YCL can help

1. Review §168(k) eligibility, acquisition / contract dates, and placed-in-service documentation for equipment and improvements.

2. Model 100% bonus, transition 40%/60% elections, class opt-outs, and §179 side by side (federal plus preliminary state notes).

3. Year-end CapEx timeline support, depreciation workpapers, and Form 4562 backup.

4. For production plants or line expansions: preliminary screening of whether §168(n) QPP warrants deeper diligence (cost segregation, use zoning, election and recapture flags).

5. Bilingual coordination: YCL serves clients from Cary, NC (RTP) and Shanghai, with CPA Chenchen Liu and Gloria supporting Chinese-speaking small-business owners on compliant planning—not aggressive shortcuts.

FAQ

Q: Does everything bought after January 19, 2025 automatically get a 100% write-off?

A: No. The asset must meet qualified-property tests, acquisition and placed-in-service timing, and (if used) used-property rules. A binding contract can pull the acquisition date earlier. Typical 39-year buildings are outside §168(k) unless a separate temporary §168(n) QPP election applies and all conditions are met.

Q: Can I use bonus depreciation and Section 179 in the same year?

A: Often yes, as part of coordinated planning for different assets or treatments—but limits, taxable-income caps, and state conformity differ. Compare scenarios; do not assume “maxing both” is always appropriate.

Q: Does North Carolina automatically allow 100% as well?

A: Do not assume that. NC has historically treated federal bonus depreciation specially. Confirm 2025–2026 NC return mechanics with current NCDOR guidance alongside the federal plan.

Book a consultation

YCL Tax, Accounting & Advisory

Web: yclcpa.com ｜ Email: info@yclcpa.com

Phone: 919-802-8376 / 980-202-0666 ｜ WeChat: YCLUSA

U.S. office: 1140 Kildaire Farm Rd. STE 208, Cary, NC 27511

Shanghai office: Suite 2-516, Zhongye Xiangteng City Plaza, Lane 31, Jiatong Road, Shanghai

Disclaimer

This article is general tax information only and is not tax, legal, or investment advice for any person or business. Application depends on asset facts, contracts, placed-in-service dates, and current federal and state law, including the latest IRS, Treasury, and North Carolina guidance. For advice specific to your situation, consult a licensed professional.