September 21, 2020

The Internal Revenue Service and the Treasury Department issued the last set of final regulations to implement the 100 percent additional first-year depreciation deduction from the Tax Cuts and Jobs Act. This final regulation will allow companies to write-off the cost of most depreciable business assets in the year those assets are placed into service.

The 100 percent additional first year depreciation deduction was created with the passage of the Tax Cuts and Jobs Act in 2017 and applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Property that generally qualifies includes machinery, equipment, computers, appliances, and furniture.

The deduction applies to qualifying property (including used property) acquired and placed into service after September 27, 2017. These final regulations are meant to provide clarifying guidance on the requirements that must be met in order for property to qualify for the deduction.

For more information on claiming the deduction, you may also access the instructions to Form 4562, Depreciation and Amortization (Including Information on Listed Property).

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