What’s New

Changes to Form 4562. New lines 19h and 20e have been added to report MACRS depreciation during the 2025 tax year for 50-year property. Line 19h is used to report depreciation using the General Depreciation System (GDS) and line 20e is used to report depreciation using the Alternative Depreciation System (ADS).

Line 23 of Form 4562 has been divided into lines 23a and 23b to report information on the amount of the basis attributable to interest costs capitalized under section 263A(f) for costs that have been capitalized under section 263A and the basis attributable to costs capitalized under section 263A other than interest costs capitalized under section 263A(f). See the instructions for Lines 23a and 23b , later.

A new line 24c has been added to Part V of Form 4562. If you own, lease, or charter an aircraft for which you are claiming depreciation, you must check the box for all that apply. See the instructions for Line 24c, later.

Section 179 deduction dollar limits. For tax years beginning in 2025, the maximum section 179 expense deduction is $2,500,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $4,000,000. Also, the maximum section 179 expense deduction for sport utility vehicles (SUVs) placed in service in tax years beginning in 2025 is $31,300.

Phase down of the special depreciation allowance for certain qualified property acquired before January 20, 2025, and certain plants bearing fruits and nuts planted or grafted before January 20, 2025. Certain qualified property (other than property with a long production period and certain aircraft) placed in service after December 31, 2024, and before January 1, 2026, is limited to a special allowance of 40% of the depreciable basis of the property. Certain property with a long production period and certain aircraft placed in service after December 31, 2024, and before January 1, 2026, is limited to a special depreciation allowance of 60% of the depreciable basis of the property. For certain plants bearing fruits and nuts planted or grafted after December 31, 2024, and before January 20, 2025, the special depreciation allowance is also limited to 40% of the adjusted basis of the specified plants. See Certain qualified property acquired after September 27, 2017, and before January 20, 2025 , and Certain plants bearing fruits and nuts planted or grafted before January 20, 2025 , later.

Note: Do not use Form 4562 to claim the deduction for energy efficient commercial buildings under section 179D.

Special depreciation allowance for certain qualified property acquired after January 19, 2025, and certain plants bearing fruits and nuts planted or grafted after January 19, 2025. P.L. 119-21, commonly known as the One Big Beautiful Bill Act, reinstated the 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025 (including long production period property and certain aircraft) and certain specified plants bearing fruits and nuts planted or grafted after January 19, 2025. However, you can elect to take a 40% special depreciation allowance (60% for long production period property and certain aircraft) for this property during first tax year ending after January 19, 2025, instead of taking the 100% special depreciation allowance. See Certain qualified property acquired after January 19, 2025 , and Certain plants bearing fruits and nuts planted or grafted after January 19, 2025 , later.

Special depreciation allowance for qualified production property. P.L. 119-21 added new section 168(n) which allows a special depreciation allowance for qualified production property. Qualified production property placed in service after July 4, 2025, the construction of which began or was acquired after January 19, 2025, is eligible for a 100% special depreciation allowance. See Qualified Production Property, later.

Solar or wind energy property no longer 5-year proper- ty. Section 70509 of P.L. 119-21 removed solar or wind energy property from the definition of 5-year property under section 168(e)(3)(B)(vi). This applies to solar or wind energy property beginning construction after December 31, 2024.

Domestic research and experimental expenditures. P.L. 119-21 added new section 174A which reinstates the deduction of domestic research or experimental expenditures paid or incurred in tax years beginning in 2025, as a current year business expense. However, you can elect to capitalize and amortize these expenditures equally over 60 months or more or elect to amortize them over a 10-year period. You must capitalize and amortize research or experimental expenditures attributable to foreign research paid or incurred in tax years beginning in 2025, ratably over a 15-year period. See Research and experimental expenditures (section 174 and 174A) , later.