Tax return changes for manufacturers

Machinery acquired after January 19, 2025 qualifies for 100% bonus depreciation, and Section 179 allows up to $2,500,000 for 2025, phasing out from $4,000,000 of purchases. Product development done in the US is deductible in the year paid again.

Manufacturers carrying debt get relief from the business interest limit, because depreciation and amortization are added back again. Those with shift workers should also look at the 2026 employer childcare and paid leave credits.

• What capital spending is committed for 2026, and when will it be placed in service?
• Is any engineering or design work done outside the US?
• Did you have disallowed interest carryforwards on 2022 to 2024 returns?

Keep the fixed asset register current with contract and placed-in-service dates, because both drive bonus eligibility. Separate engineering costs into their own accounts so domestic research is easy to identify.