Leave it to the US Congress to come up with a goofy name for a tax plan, but that’s what they did.
Congress passed the Protecting Americans from Tax Hikes (PATH) Act on Dec. 18, 2015. It was a tax extension package covering depreciation-related rules.
The end of 2017 is the final time to claim 50% depreciation on purchases up to $500,000. The bonus depreciation percentage is 50 percent for items placed into service during 2015 through 2017, but then phases down to 40 percent in 2018 and 30 percent in 2019.
The Act extends bonus depreciation for property acquired and placed in service during 2015 through 2019 (with an additional year for certain property with a longer production period). The bonus depreciation percentage is 50 percent for property placed in service during 2015, 2016, and 2017, but then phases down to 40 percent in 2018 and 30 percent in 2019.
Bonus depreciation may result in substantial present value tax savings for businesses with plans to purchase engineering solutions. Please click here for a deeper dive into bonus depreciation.
Bonus depreciation rates
| Start Date | End Date | Bonus Depreciation |
|---|---|---|
| Sept. 11, 2001 | May 5, 2003 | 30% |
| May 6, 2003 | Dec. 31, 2004 | 50% |
| Jan. 1, 2008 | Sept. 8, 2010 | 50% |
| Sept. 9, 2010 | Dec. 31, 2011 | 100% |
| Jan. 1, 2012 | Dec. 31, 2017 | 50% |
| Jan. 1, 2018 | Dec. 31, 2022 | 100% |
| Jan. 1, 2023 | Dec. 31, 2023 | 80% |
| Jan. 1, 2024 | Dec. 31, 2024 | 60% |
| Jan. 1, 2025 | Dec. 31, 2025 | 40% |
| Jan. 1, 2026 | Dec. 31, 2026 | 20% |
If you’re ready to look at your next investment, now is the perfect time. Talk to our experts, we can help your team hit the ground running whether your needs are CAD, CAM, CAE, or PLM.