AMERICA’S PRODUCTION RENAISSANCE BEGINS: TREASURY AND IRS UNVEIL POWERFUL NEW PATHWAY FOR 100% DEPRECIATION ADVANTAGE

THE PRESS CENTER | BREAKING NEWS | IRS

FEBRUARY 22 2026 AT 6:36 PM

The Department of the Treasury and the Internal Revenue Service have unleashed a transformative wave of opportunity—issuing clear, decisive interim guidance that empowers taxpayers to harness the full strength of the special depreciation allowance for qualified production property under the One, Big, Beautiful Bill. This announcement marks not just a procedural update, but a powerful invitation for businesses to expand, innovate, and accelerate their growth with confidence.

Today’s guidance affirms a groundbreaking provision: taxpayers may elect to claim a depreciation deduction of up to 100% of the unadjusted depreciable basis of any qualified production property placed in service during a taxable year. This is not a tentative benefit—it is a bold, unequivocal incentive designed to fuel investment, energize American industry, and reward those who build, create, and transform.

Qualified production property refers to nonresidential real property that a taxpayer uses as an essential, integrated component of a qualified production activity. These activities include manufacturing, chemical production, agricultural production, and refining—industries that shape raw materials into substantially transformed, value‑creating products. This allowance applies exclusively to property placed in service after July 4, 2025, and before January 1, 2031, ensuring a clear, well‑defined window for strategic planning and decisive action.

The interim guidance in Notice 2026‑16 provides complete clarity on every critical element, including:

• Precise definitions of qualified production property and qualified production activity
• Exact methods for determining the special depreciation allowance
• Clear procedures for electing to treat property as qualified production property
• Transparent rules for depreciation recapture when property no longer meets qualification standards

Taxpayers can rely fully and confidently on this guidance until the forthcoming proposed regulations are issued. Treasury and the IRS are also actively seeking public input—inviting comments on the interim guidance and requesting insights on areas where additional clarity or expansion may be beneficial. All comments should be submitted within 60 days of the notice’s release.

This announcement is more than regulatory housekeeping—it is a declaration of momentum. It signals a future where American production stands stronger, grows faster, and operates with greater certainty. It empowers taxpayers to invest boldly, innovate fearlessly, and step into a new era of economic possibility with unwavering clarity.

SOURCE CREDIT: IRS.GOV/NEWS