US: IRS publishes updated depreciation tables for passenger vehicles

The IRS has released 2026 depreciation limits for passenger automobiles under Revenue Procedure 2026-15, with first-year deductions ranging from USD 12,300 to USD 20,300 depending on whether the vehicle qualifies for the 100% bonus depreciation under the new One, Big, Beautiful Bill Act or the phased-out 20% rate for pre-2025 acquisitions.

The US Internal Revenue Service (IRS) has published Revenue Procedure 2026-15, providing the updated 2026 depreciation tables for passenger automobiles.

This revenue procedure provides: (1) two tables of limitations on depreciation deductions for owners of passenger automobiles placed in service by the taxpayer during calendar year 2026; and (2) a table of dollar amounts that must be used to determine income inclusions by lessees of passenger automobiles with a lease term beginning in calendar year 2026. These tables reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code (Code).1 For purposes of this revenue procedure, the term “passenger automobiles” includes trucks and vans.

Background

For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. For passenger automobiles placed in service after 2018, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount that is determined using the automobile component of the Chained Consumer Price Index for All Urban Consumers published by the Department of Labour (C-CPI-U).

Section 168(k), as amended by Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA), applies to property acquired and placed in service after 19 January 2025.

Section 168(k)(1), as amended by the OBBBA, allows an additional first year depreciation deduction under § 167(a) equal to 100% of the property’s adjusted basis for the taxable year in which qualified property, as defined in § 168(k)(2), is placed in service.

Section 168(k), as in effect prior to amendment by the OBBBA (former § 168(k)), applies to property acquired after 27 September 2017, and before 20 January 2025, which is placed in service before 1 January 2027.

Former section 168(k)(1) provides that the § 168(k) additional first year depreciation deduction is equal to the applicable percentage of the property’s adjusted basis. Pursuant to former § 168(k)(6)(A), the applicable percentage is 100%  for qualified property placed in service after 27 September 2017, and before 1 January 2023, and is phased down 20% each year thereafter for property placed in service through 31 December 2026.

Accordingly, the applicable percentage for qualified property acquired after 27 September 2017, and before 20 January 2025, and placed in service during calendar year 2026 is 20%. For qualified property acquired and placed in service after 27 September 2017,

REV. PROC. 2026-15 

Table 1 

Depreciation limitations for passenger automobiles acquired after 27 September 2017, and placed in service during calendar year 2026, for which the § 168(k) additional first year depreciation deduction applies.

REV. PROC. 2026-15 

Table 2 

Depreciation limitations for passenger automobiles placed in service during calendar year 2026 for which no § 168(k) additional first year depreciation deduction applies