OBBBA Year One: What Changed for Businesses in 2026

2026 is the first full tax year under the One Big Beautiful Bill Act, or as the IRS now calls it, the Working Families Tax Cuts. Your 2025 return caught only a partial year, and much of the IRS guidance was still being written at the time.

Now that a full year’s worth of provisions apply, here’s where things stand.

What the OBBBA Changed for Businesses in 2026 

Bonus Depreciation Is Back at 100%, Permanently

The OBBBA permanently restored 100% bonus depreciation, which lets you deduct the full cost of qualifying equipment in the year you place it in service rather than spreading it across five or seven years.

Under prior law this was phasing down, dropping to 20% for 2026 and disappearing in 2027. That schedule was repealed, so the deduction no longer shrinks the longer you wait. Timing a purchase goes back to being a business decision instead of a race against the calendar.

Property has to be acquired after January 19, 2025. The IRS covers the current depreciation provisions and issued Notice 2026-11 in January with guidance on the timing.

The Section 179 Limit Rose Substantially

Section 179 is the other route to a first-year write-off. It works differently from bonus depreciation, carrying a dollar ceiling and a restriction against using it to create a loss, but the practical effect for most small businesses is similar.

Under Rev. Proc. 2025-32, the 2026 limit is $2,560,000, with the benefit phasing out once you place more than $4,090,000 of property in service. Heavy SUVs carry a separate $32,000 cap.

Those ceilings sit high enough that most businesses won’t approach them, which is useful to know in its own right. If Section 179 isn’t your constraint, the planning question shifts to timing and to how your state handles the deduction.

The QBI Deduction Became Permanent at 20%

If your business is an LLC, S corp, partnership, or sole proprietorship, the profits flow onto your personal tax return. The qualified business income deduction lets you subtract 20% of that business income before the tax gets calculated. On $200,000 of profit, that’s $40,000 you’re not taxed on.

The deduction had been set to sunset at the end of 2025. Making it permanent removes an expiration date that owners have been planning around for two years.

Two smaller adjustments came with it. The deduction shrinks for higher earners in certain service businesses, and the income band over which it shrinks got wider, which softens the effect. There’s also a new floor: anyone with at least $1,000 of qualified business income gets a deduction of at least $400. Both sets of figures are set out in Rev. Proc. 2025-32.

The SALT Cap Rose, With a Catch

The state and local tax (SALT) deduction cap limits how much state income tax and property tax you can deduct when you itemize on your personal return. It had been $10,000 since 2018 and climbed sharply under the OBBBA.

For 2026 it sits at $40,400. The catch is that it shrinks once your income passes $505,000, falling by 30 cents for every dollar above that, though it never drops below $10,000 ($5,000 if you’re married filing separately). Both figures step up 1% a year through 2029.

The increase expires in 2030 and reverts to $10,000. If your income sits anywhere near that phase-down, the timing of income and deductions across the next few years is a conversation to have well before December.

The Excess Business Loss Cap Tightened for 2026 

If your business loses money, you can usually apply that loss against your other income, such as a spouse’s salary or investment earnings, and lower your overall tax bill. But there’s a limit on how much of it you’re allowed to use in a single year. Anything past the limit gets carried into future years instead.

That limit went down for 2026. Under Rev. Proc. 2025-32, the 2026 limit is $256,000 for single filers and $512,000 for joint, compared with $313,000 and $626,000 in 2025.

This is the one that surprises people, because nearly every other inflation-adjusted figure went up for 2026 while this one moved the other way. It also interacts with the equipment write-offs above, since a large purchase can create precisely the kind of loss this provision limits.

Do Georgia and South Carolina Follow the OBBBA?

Here’s the part that catches CSRA businesses off guard. You can write off a piece of equipment in full on your federal return and still owe tax on that same income in Georgia or South Carolina.

Neither state automatically follows federal tax law. Each one decides for itself which federal changes to adopt, and both have declined to adopt the full first-year write-off.

In Georgia, you add that write-off back to your Georgia income in year one, then deduct it gradually over the equipment’s normal life. You get the deduction eventually. What you don’t get is all of it now, which was the reason to buy before December 31 in the first place. Georgia did adopt the higher Section 179 limits this year under House Bill 1199, signed in March, but it won’t let you apply them to building improvements. The Department of Revenue keeps a running list of federal changes Georgia does and doesn’t follow.

In South Carolina it goes further. The state’s tax code is currently pinned to federal law as it stood on December 31, 2024, which is before the OBBBA passed. None of this year’s changes apply on a South Carolina return, including the higher Section 179 ceiling.

Making the federal write-off permanent changed the character of this problem. Under the old shrinking schedule, the state add-back was a temporary nuisance that would have sorted itself out by 2027. Now it’s a standing feature of buying equipment on either side of the river. 

What This Means for Your Q4

Most of these provisions reward decisions you make before December 31, and a few carry lead times that the last weeks of the year can’t accommodate. If you haven’t sat down with your accountant since filing season, a mid-year review is the place to work out which of these reach your business.

For the tips and overtime provisions, which affect employees and payroll rather than business returns, we covered those in our post on the tips and overtime changes.

Have Questions About How This Affects Your Business?

A year in, which of these provisions reach you depends on your entity type and revenue, along with which side of the river you operate on. Our tax experts can walk through your situation and tell you what’s still on the table for this year.

Reach out to SME CPAs to set up a conversation.