Section 179 and Bonus Depreciation for Tax Year 2026
Read this first
Murgado Ford of Chicago is a vehicle dealership. We are not a tax advisor, we do not prepare returns, and nothing on this page is tax advice. A deduction is not a refund and it is not cash in hand; it reduces taxable income, and what that is worth to you depends entirely on your own tax situation. Every figure below is stated for tax year 2026 and is taken from published IRS documents that are named and linked. Whether any particular vehicle is eligible depends on that specific vehicle's gross vehicle weight rating, its body configuration and how your business uses it. Take this page to your CPA or enrolled agent and let them tell you what applies.
For tax year 2026 the IRS has set the maximum Section 179 expense deduction at $2,560,000, with a phase-out threshold of $4,090,000, and a separate $32,000 cap on the Section 179 deduction for certain heavy passenger vehicles. Those three figures come from Revenue Procedure 2025-32, section 4.24. A business that places more than $4,090,000 of qualifying property in service during tax year 2026 sees the $2,560,000 limit reduced dollar for dollar by the excess. Businesses may be eligible to expense qualifying vehicles under these rules. No one can promise a specific dollar outcome without seeing your return.
Tax year 2026 against tax year 2025
Section 179 inflation-adjusted limits, tax year 2026 against tax year 2025
| Limit | Tax year 2026 | Tax year 2025 |
|---|
| Maximum Section 179 expense deduction | $2,560,000 | $2,500,000 |
|---|
| Phase-out threshold | $4,090,000 | $4,000,000 |
|---|
| Cap for certain heavy passenger vehicles | $32,000 | $31,300 |
|---|
The contrast matters locally. This dealership's own Section 179 page was written for tax year 2025 and still displays the prior-year figures, including the $31,300 heavy-vehicle cap. Use that page for the dealership's contact path and use the numbers on this page, cited above, for tax year 2026. If you see the older figures quoted anywhere, that is the reason.
What the $32,000 cap actually applies to
The cap is not a general "SUV rule" and it is not a truck rule. Internal Revenue Code section 179(b)(5) applies it to a four-wheeled vehicle that is primarily designed to carry passengers over public streets, roads or highways, that is not subject to section 280F (which in practice means it is rated above 6,000 lb gross vehicle weight), and that is rated at not more than 14,000 lb gross vehicle weight. A vehicle inside that band has its Section 179 deduction capped at $32,000 for tax year 2026 unless one of three statutory exceptions applies.
The three statutory exceptions, quoted
Section 179(b)(5) excludes from the cap a vehicle that meets any one of the following. The wording below is the statutory language, not a summary.
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Exception (i)
A vehicle "designed to have a seating capacity of more than 9 persons behind the driver's seat."
This is the exception that a 12- or 15-passenger Transit configuration is usually examined against. Seating capacity as designed is the test, not how many seats are installed on the day you buy it.
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Exception (ii)
A vehicle "equipped with a cargo area of at least 6 feet in interior length which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment."
Note the measurement is interior length, and note the threshold is 6 feet. A 5.5 ft F-150 box does not meet this test. A 6.5 ft or 8.0 ft box is nominally longer than 6 feet, but the interior measurement and the "not readily accessible" condition still have to be confirmed for the actual vehicle by a tax professional.
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Exception (iii)
A vehicle that "has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield."
This is a three-part conjunctive test. All three conditions must be true at once. Treat it as three separate things to verify on the specific van: the enclosure, the absence of seating behind the driver, and the 30-inch measurement forward of the windshield. Do not assume that all cargo vans qualify, and do not let anyone tell you they do.
Where the F-150 sits, honestly
Every one of the tests above starts from the vehicle's gross vehicle weight rating, and Ford does not publish a GVWR for the F-150. Some F-150 configurations exceed 6,000 lb and some do not, and the difference decides which set of rules your accountant applies. The only correct source is the Safety Compliance Certification Label, which Ford describes as being "shown on the vehicle's Safety Compliance Certification Label, located on the driver's side door lock facing or the door latch post pillar." Before you plan around any of this, open the driver's door on the actual truck, photograph the label and give the photograph to your tax professional together with the box length.
Bonus depreciation after the OBBBA
Section 179 is not the only mechanism. The One Big Beautiful Bill Act, Public Law 119-21, changed bonus depreciation. IRS Publication 946 states that the law "reinstated the 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025." The IRS newsroom describes it as a permanent 100% additional first year depreciation deduction for eligible property acquired after that date. The governing guidance is IRS Notice 2026-11, issued on 01/14/2026. A taxpayer may elect 40% instead of 100%.
Two details are commonly missed. First, the acquisition-date test and the placed-in-service test are separate tests, and a vehicle can satisfy one without satisfying the other. Second, bonus depreciation and Section 179 interact; which one your accountant applies first, and whether an election is worth making, is a return-level decision rather than a showroom decision.
The more-than-50-percent rule and recapture
Section 179 property must be used predominantly, meaning more than 50%, in a qualified business use. That is a continuing requirement rather than a one-time test at purchase. IRS Publication 946 states the consequence verbatim:
"If the section 179 property is not used predominantly (more than 50%) in your trade or business at any time before the end of the property's recovery period, the benefit of the section 179 expense deduction must be reported as 'other income' on your return."
In plain operational terms: if a truck that was expensed drops below 50% business use during the recovery period, the benefit comes back as income. That is why mileage logs matter, and it is why a vehicle that doubles as a personal daily driver is a harder case than a van that never leaves the business.
Documents to hand your tax professional
Tax professional disclaimer
This section is general information about published federal tax rules for tax year 2026. It is not tax, legal or accounting advice, and it is not a promise of any outcome. Businesses may be eligible for a Section 179 deduction or bonus depreciation on a qualifying vehicle. Eligibility and the amount depend on the specific vehicle's gross vehicle weight rating and body configuration, on the percentage of qualified business use, on when the vehicle is acquired and placed in service, and on the buyer's overall tax situation. A deduction reduces taxable income; it is not a refund, a rebate or cash back. Rules change, and IRS guidance is updated. Consult a qualified tax professional about your own circumstances before making a purchase decision. Murgado Ford of Chicago is not a tax advisor and does not provide tax advice.
