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OBBBA Made Three Business Tax Breaks Permanent: Bonus Depreciation, R&D Expensing, and QBI (Jul 2026)
The One Big Beautiful Bill Act permanently restored 100% bonus depreciation, brought back immediate expensing of domestic R&D under new Section 174A, and locked in the 20% QBI deduction. Here is what REG and TCP candidates need to know.
Published July 15, 20267 min readVerified as of July 15, 2026
Three Provisions, Now Permanent
Three of the most heavily tested business provisions on REG and TCP were scheduled to shrink or expire after 2025. The One Big Beautiful Bill Act reversed all three. It permanently restored 100% bonus depreciation, created new Section 174A to bring back immediate expensing of domestic research costs, and made the 20% qualified business income deduction permanent. All three are testable on REG and TCP starting July 1, 2026.
100% Bonus Depreciation Is Back for Good
Under the Tax Cuts and Jobs Act, bonus depreciation was phasing down, from 60% in 2024 and scheduled to drop to 40% in 2025 before disappearing entirely by 2027. OBBBA reversed that phasedown and made 100% first-year bonus depreciation under Section 168(k) permanent. It applies to qualified property acquired after January 19, 2025 and placed in service. Property under a written binding contract entered into before January 20, 2025 generally does not qualify. OBBBA also raised the Section 179 expensing limit to $2.5 million, with the phaseout beginning at $4 million of qualifying purchases. The IRS issued interim guidance on the restored rules in Notice 2026-11.
Domestic R&D Expensing Returns Under Section 174A
The most disruptive TCJA change for small businesses was the requirement, effective 2022, to capitalize and amortize research and experimental costs instead of deducting them immediately. OBBBA created new Section 174A, which permanently allows immediate expensing of domestic research costs for tax years beginning after December 31, 2024. Foreign research still has to be capitalized and amortized over 15 years. Small businesses meeting the gross-receipts test of $31 million or less can elect to apply Section 174A retroactively to domestic research going back to the 2022 tax year, through amended returns or an accounting method change. Other taxpayers can deduct their remaining unamortized 2022 through 2024 domestic research costs either entirely in the first tax year beginning after December 31, 2024, or ratably over two years. The IRS provided the procedural rules in Revenue Procedure 2025-28.
The QBI Deduction Is Permanent at 20%
The Section 199A qualified business income deduction was set to sunset at the end of 2025. OBBBA made it permanent. An earlier version of the bill would have raised the deduction to 23%, but that was dropped, so the rate stays at 20%. For 2026, the taxable-income threshold is $201,750 for single filers and $403,500 for married filing jointly, above which the wage-and-property limits phase in. OBBBA widened that phase-in range to $75,000 for single filers and $150,000 for joint filers. It also added a new minimum deduction of $400 for taxpayers with at least $1,000 of qualified business income from a business in which they materially participate, indexed for inflation after 2026.
What This Means for REG and TCP
These three provisions sit squarely in the most heavily weighted parts of REG and TCP: cost recovery, property transactions, and the taxation of pass-through entities. Because the deadlines and dollar figures changed, questions written for the pre-2026 code can now test the wrong answer. If you are sitting on or after July 1, 2026, work these from current materials. For the broader set of OBBBA changes, see our OBBBA tax changes overview, and for the routine 2026 figures see our 2026 tax figures guide.
Sources
- 1.IRS — Revenue Procedure 2025-28 (Section 174A transition procedures)(accessed Jul 15, 2026)
- 2.Grant Thornton — Full Expensing of Domestic Research Under the OBBBA(accessed Jul 15, 2026)
- 3.Grant Thornton — OBBBA Offers New Ways to Accelerate Depreciation(accessed Jul 15, 2026)
- 4.Foster Garvey — OBBBA Part 4: Qualified Business Income Deduction (Code Section 199A)(accessed Jul 15, 2026)
Brennan Kolar
Founder, Atlas CPA Index
Brennan Kolar is the founder of Atlas CPA Index, an independent CPA review comparison platform covering all 55 U.S. jurisdictions. With over 10 years of experience with CPA review, he built Atlas to help candidates find the right review course based on how they actually learn, not which provider has the biggest ad budget.
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