Bonus Depreciation on Vehicles: GVWR Limits, Section 179, and Recapture

Bonus depreciation on vehicles lets a business deduct a large share, often all, of a qualifying vehicle’s purchase price in the year it is placed in service rather than spreading the write-off across five or six years. How much you actually get in year one turns almost entirely on the vehicle’s weight. Lighter cars and crossovers are capped at $20,300 for 2026, while SUVs, trucks, and vans with a Gross Vehicle Weight Rating above 6,000 pounds can often be written off entirely. The One, Big, Beautiful Bill Act, signed July 4, 2025, permanently restored the bonus depreciation rate to 100% for qualifying property acquired and placed in service after January 19, 2025, with no scheduled phase-down.¹

The 6,000-Pound GVWR Threshold

The single most important factor in your deduction is the manufacturer’s Gross Vehicle Weight Rating. GVWR is the maximum loaded weight the vehicle is designed to handle, including passengers and cargo. It is not curb weight. GVWR is typically printed on a sticker inside the driver’s door jamb, and it is almost always higher than the vehicle’s empty weight. A sedan with a 4,200-pound curb weight might have a GVWR of only 4,900 pounds, while an SUV with a 5,600-pound curb weight could carry a GVWR above 6,000 pounds.

Under Section 280F, the IRS defines a “passenger automobile” as a four-wheeled vehicle made primarily for public roads and rated at 6,000 pounds unloaded gross vehicle weight or less (or gross vehicle weight for trucks and vans).² Vehicles that fit that definition face strict annual depreciation caps. Vehicles above 6,000 pounds GVWR fall outside the definition and escape those caps. Three tiers result:

Under 6,000 pounds GVWR: subject to Section 280F annual dollar caps. Most sedans, compact SUVs, and small crossovers.
6,001 to 14,000 pounds GVWR: exempt from Section 280F caps. Many full-size SUVs, pickup trucks, and cargo vans. SUVs in this range face a separate Section 179 cap, discussed below.
Over 14,000 pounds GVWR: no depreciation restrictions. Heavy-duty commercial trucks, large passenger buses, specialty vehicles such as food trucks.³

Caps for Vehicles Under 6,000 Pounds

If your vehicle is at or below 6,000 pounds GVWR, Section 280F limits annual depreciation regardless of what the vehicle cost. For passenger automobiles placed in service in 2026:

Year 1 with bonus depreciation: $20,300
Year 2: $19,800
Year 3: $11,900
Each year after that: $7,160

If you elect out of bonus depreciation, the first-year cap drops to $12,300. The limits for years two through five stay the same.⁴ These caps adjust for inflation annually.²

The practical effect: for a lighter vehicle, sticker price barely matters in year one. Whether you buy a $35,000 sedan or a $55,000 luxury car, your first-year deduction maxes out at $20,300 at 100% business use. The remaining cost spreads across subsequent years at the capped rates, often stretching past the normal five-year recovery period.

Heavier Vehicles: Full Write-Off Possible

Vehicles above 6,000 pounds GVWR are not passenger automobiles under Section 280F, so the annual dollar caps do not apply. A qualifying heavy vehicle used 100% for business can be written off entirely in the first year through bonus depreciation.

There is one catch for SUVs. Under Section 179, sport utility vehicles with a GVWR between 6,000 and 14,000 pounds face a separate dollar cap on the Section 179 portion of the deduction. The 2025 figure is $31,300, and the 2026 figure will be slightly higher after inflation adjustment.³ This limits how much of the cost you can expense under Section 179 specifically. Bonus depreciation has no such cap for heavy vehicles, so any cost beyond the Section 179 piece can still be written off through bonus. The SUV cap limits flexibility more than total deduction.

Pickup trucks with a full-size bed, cargo vans, and vehicles with no passenger seating behind the driver are generally not treated as SUVs for this cap. Vehicles above 14,000 pounds GVWR have no Section 179 cap at all.

The 50% Business Use Rule

A vehicle must be used more than 50% for business in the year placed in service to qualify for bonus depreciation at all.⁵ Clear that threshold and the deduction is proportional to actual business use. A vehicle used 75% for business yields a deduction based on 75% of cost.

The percentage is business miles divided by total miles for the year.⁶ Commuting between home and a regular workplace is personal, not business, no matter the distance. Trips between work locations, client visits, and travel to temporary job sites generally do count. An owner who drives 20,000 miles a year but commutes 12,000 of them is at 40% business use and does not qualify.

Employees face an extra hurdle. An employee’s use counts as business use only if the employer requires the vehicle as a condition of employment and the use is for the employer’s convenience.² Choosing to use a personal car for work errands does not meet it.

Used Vehicles Qualify; Leased Vehicles Do Not

Bonus depreciation is not limited to new vehicles. Since the Tax Cuts and Jobs Act expanded the rules in 2017, used vehicles qualify as long as five conditions are met: the vehicle was not previously used by you or a predecessor, you did not buy it from a related party, the purchase was a genuine arm’s-length transaction, you did not inherit it, and the cost does not include basis carried over from other property.⁷ Buying a used truck or SUV from a dealership or unrelated private seller normally meets these. The vehicle just has to be new to you.

Leased vehicles are a different matter. Depreciation belongs to the vehicle’s owner, and under a lease that is the leasing company. Lessees may deduct lease payments as a business expense, but the bonus depreciation rules described here apply only when the business holds title.⁷

How Section 179 and Bonus Depreciation Stack

Section 179 and bonus depreciation are separate provisions that can apply to the same vehicle in sequence. Section 179 comes first, reducing the basis, and bonus depreciation then applies to what remains.³ A few differences matter for planning:

Section 179 is elective. Bonus depreciation is automatic for all qualifying property in an asset class unless you affirmatively elect out.
Section 179 cannot create a loss. The deduction is capped at your taxable income from active trades or businesses, with any unused amount carried forward.³
Bonus depreciation has no income limitation. It can create or increase a net operating loss, which carries forward. That makes it more useful in a low-income or loss year.⁸
An election out of bonus depreciation applies to all property in the same asset class placed in service that year. You cannot pick and choose between two vehicles that are both five-year property.

With 100% bonus depreciation available again, many heavy-vehicle buyers simply skip Section 179 entirely and run the full purchase price through bonus. The Section 179 route still matters when the SUV cap, state conformity, or an election-out plays into the picture.

Two Worked Examples

Heavy pickup, placed in service 2026

A business buys a $78,000 full-size pickup with a 7,500-pound GVWR, used 100% for business. Section 280F caps do not apply. Claiming 100% bonus depreciation writes off the entire $78,000 in year one. If the same truck were used 80% for business, the deduction would be $62,400. The personal-use portion is never deductible.

Sedan, placed in service 2026

A business buys a $48,000 sedan with a 4,500-pound GVWR, used 100% for business. Section 280F caps apply. The first-year deduction is capped at $20,300. The remaining $27,700 is recovered through the capped schedule: up to $19,800 in year two, $11,900 in year three, and $7,160 per year after that until the basis is fully recovered.⁴ Full recovery takes roughly four to five additional years.

The gap between a $78,000 year-one deduction and a $20,300 year-one deduction is why the 6,000-pound threshold drives so many purchase decisions.

Recapture: Two Ways It Can Hit You

Business use drops to 50% or less

If business use falls to 50% or below in any year of the MACRS recovery period, you must recapture the extra depreciation previously claimed through bonus and accelerated MACRS.² The recapture equals what you actually deducted minus what you would have deducted under the slower Alternative Depreciation System. The excess goes back onto your return as ordinary income in the year business use dropped, and you must switch to ADS straight-line for the rest of the recovery period. This catches owners who buy a heavy SUV for a business that later winds down or who gradually shift the vehicle to personal use.

Selling the vehicle

On sale or other disposition, all depreciation you previously claimed, including Section 179, bonus, and regular MACRS, is subject to Section 1245 recapture. The gain treated as ordinary income is the lesser of total depreciation claimed or the gain on the sale.⁹ Ordinary-income rates apply, not capital gains rates.

The math is sharp. A $75,000 truck fully written off through bonus depreciation has an adjusted basis of zero. Sell it later for $40,000, and the entire $40,000 is ordinary income because it sits within the $75,000 of depreciation claimed. Only proceeds above the original $75,000 cost could ever receive capital gains treatment. Dispositions of business vehicles are reported on Form 4797.¹⁰ The deduction still has value, since you took it in year one when you needed the cash flow, but ignoring recapture when planning a purchase produces unpleasant surprises.

Clean Vehicle Credits Reduce Your Depreciable Basis

If you buy an electric or plug-in hybrid for business, you may also qualify for a clean vehicle credit. The Section 30D credit for new clean vehicles can be up to $7,500. For qualifying commercial clean vehicles, the Section 45W credit is based on a percentage of the vehicle’s cost.¹¹

Claiming either credit reduces the vehicle’s depreciable basis. Section 30D expressly requires a basis reduction equal to the credit, and the deduction (including bonus depreciation) must be reduced by the credit claimed.¹² On a $60,000 electric SUV with a $7,500 credit, your depreciable basis is $52,500. You still claim bonus depreciation on the reduced basis. Both benefits apply, but not to the same dollars.

State Tax Does Not Always Follow Federal

Roughly two-thirds of states have historically decoupled from federal bonus depreciation. In those states, you must add back some or all of the federal bonus deduction on the state return and recalculate using the state’s rules. Several states issued new decoupling guidance after the One, Big, Beautiful Bill Act restored 100% bonus depreciation in 2025. The specifics vary: some require a full add-back with a corresponding subtraction spread over later years, while others disallow bonus depreciation entirely and require straight-line from the start. If your business operates in a state with an income tax, check conformity before assuming the state bill drops as much as the federal.

Records You Need to Keep

The IRS treats vehicles as “listed property,” which raises the documentation bar. You need contemporaneous records of business use. A mileage log is the standard, and each business trip entry must capture the date, destination, business purpose, and miles driven.⁶ Contemporaneous means recorded at or near the time of each trip, not reconstructed from memory at year-end.

Keep the purchase agreement showing cost, the window sticker or manufacturer documentation showing GVWR, and your depreciation calculations. If business-use percentage shifts year to year, keep annual logs consistently through the full recovery period. Vehicle deductions draw audit attention because they are commonly overstated, and a missing or incomplete log can wipe out the entire deduction. That is an expensive outcome on a vehicle where you claimed a $70,000 or $80,000 first-year write-off.

1
Internal Revenue Service. Interim Guidance on Additional First Year Depreciation Deduction Under Section 168(k)
2
Office of the Law Revision Counsel. 26 USC 280F – Limitation on Depreciation for Luxury Automobiles
3
Internal Revenue Service. Instructions for Form 4562 (2025) – Introductory Material
4
Internal Revenue Service. Rev. Proc. 2026-15
5
CCH AnswerConnect. MACRS ADS and Depreciation Recapture Required if Passenger Automobile or Listed Property Used 50 Percent or Less for Qualified Business Use
6
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
7
Internal Revenue Service. Additional First Year Depreciation Deduction (Bonus) – FAQ
8
Internal Revenue Service. One, Big, Beautiful Bill Provisions
9
Office of the Law Revision Counsel. 26 USC 1245 – Gain From Dispositions of Certain Depreciable Property
10
Internal Revenue Service. Publication 544 (2025), Sales and Other Dispositions of Assets
11
Internal Revenue Service. Topic G – Frequently Asked Questions About Qualified Commercial Clean Vehicle Credit
12
Office of the Law Revision Counsel. 26 USC 30D – Clean Vehicle Credit