Section 179 for CNC machines
and industrial equipment, 2026.
Buying a machine tool before year-end can move a large deduction into this tax year, but only if the machine is installed and ready to run by the last day of your tax year. This guide explains the federal rules in plain English, with the 2026 numbers published by the IRS.
Not tax advice. Talk to your tax adviser or CPA about your situation. Information is current for the 2026 U.S. federal tax year (checked October 29, 2026); state rules differ.
Quick answer
- Section 179 lets a business deduct the cost of qualifying equipment, such as a CNC machine, in the year it is placed in service, instead of depreciating it over several years.
- 2026 limit: $2,560,000. The limit drops dollar for dollar once the Section 179 property you place in service in 2026 costs more than $4,090,000.
- 100% bonus depreciation applies to qualifying property acquired after January 19, 2025, and it is not limited by your business income.
- New and used machines both can qualify. A used machine must be new to you and must not come from a related party.
- The deadline is placed in service: installed and ready for use by the end of your tax year (December 31 for a calendar-year business). Ordered or paid for is not enough.
- Inventory does not qualify. Machines a dealer holds for resale are inventory, not equipment used in the business.
The 2026 Section 179 and bonus depreciation figures.
| 2026 | 2025 | |
|---|---|---|
| Maximum Section 179 deduction | $2,560,000 | $2,500,000 |
| Phase-out begins when Section 179 property placed in service exceeds | $4,090,000 | $4,000,000 |
| Section 179 fully phased out at (limit plus threshold) | $6,650,000 | $6,500,000 |
| Section 179 cap for a sport utility vehicle | $32,000 | $31,300 |
| Bonus (additional first-year) depreciation | 100% for qualifying property acquired after January 19, 2025. For the first tax year ending after that date, a business may elect 40% instead (60% for certain long-production property). | |
Sources: IRS Rev. Proc. 2025-32 and Publication 946 (2026 and 2025 limits); 26 U.S.C. 168(k) and IRS Notice 2026-11 (bonus depreciation). The fully phased-out figure is the arithmetic of the two IRS numbers.
Shops buying machines before year-end.
This guide is for owners, controllers and plant managers of job shops, contract manufacturers and fabrication shops who are deciding whether to buy a CNC machine, press brake, laser, grinder, inspection equipment or tooling before the end of the year. It explains how the federal rules work so you can ask your tax adviser better questions. It does not tell you what to do with your own return.
Three rules decide most cases.
- It must be qualifying property. Section 179 covers tangible personal property you buy for use in the active conduct of your business, such as machinery and equipment. Machines held for sale are inventory and are excluded.
- It must be placed in service in the tax year. The IRS treats property as placed in service when it is ready and available for a specific use. A machine still on the truck, or delivered but not connected, usually is not.
- Limits apply. Section 179 is capped at $2,560,000 for 2026, reduced once purchases pass $4,090,000, and limited to your taxable business income (the excess carries forward). 100% bonus depreciation has no dollar cap and no business-income limit for property acquired after January 19, 2025.
Count back from December 31.
Freight, rigging, power, foundation work and run-off all take time. A machine bought in the middle of December can easily miss December 31. Our backward timeline shows typical lead times for each step and the documents that prove the in-service date.
Everything in this section.
Need a used machine running by December 31? See where to find a used machine before year-end: OEM certified pre-owned programs, dealers, consignment, auctions and marketplaces, and how each one affects your timeline. Or ask MBB to help you find it.
The Section 179 guide.
Where these facts come from.
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments, section 179 limits)
- IRS Publication 946, How To Depreciate Property
- 26 U.S.C. 179 (election to expense certain depreciable business assets)
- 26 U.S.C. 168(k) (special allowance for certain property)
- IRS Notice 2026-11 (100% additional first-year depreciation)
- Treasury and IRS guidance on the 100% first-year depreciation deduction
Published by Delta Arc, LLC · Editor: Michael Davis · Last reviewed October 29, 2026.
Not tax advice. Talk to your tax adviser or CPA about your situation. Information is current for the 2026 U.S. federal tax year (checked October 29, 2026); state rules differ.