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Tax planning for an aircraft purchase used to mean racing a shrinking deadline. Every year the phase-down clock ticked, and buyers rushed to close before the bonus rate dropped again. That pressure is gone. For qualifying aircraft acquired and placed in service after January 19, 2025, federal law now allows a permanent 100% first-year deduction. The new question is not how fast you close, but how carefully you document business use. A Tampa aviation tax attorney at AvTax Advisors can help you plan a 2026 purchase that holds up under scrutiny.
Is the Bonus Depreciation Phase-Down Still in Effect?
No. The phase-down that the Tax Cuts and Jobs Act put in place no longer applies to new aircraft purchases. Under that earlier schedule, bonus depreciation was set to fall to 40% for property placed in service in 2025, 20% in 2026, and zero in 2027. The One Big Beautiful Bill Act, signed in July 2025, ended that schedule going forward. For qualifying property acquired and placed in service after January 19, 2025, the law now allows a permanent 100% first-year deduction under current rules, with no scheduled phase-down.
This change applies directly to business aircraft. The IRS has confirmed in published guidance (Notice 2026-11) that the 100% deduction covers qualifying aircraft acquired after the January 19, 2025 cutoff. If you bought an aircraft before that date, the older phase-down rates still control your deduction.
How Much Can You Deduct on a 2026 Aircraft Purchase?
If your aircraft qualifies, you can deduct 100% of its cost in the year you place it in service. There is no scheduled reduction, so a purchase in 2026 receives the same first-year treatment as one in 2027 or later. To qualify, the aircraft generally must have a recovery period of 20 years or less, which most business aircraft satisfy, and you must meet the bonus-depreciation acquisition rules. For most buyers, that means you (or your business) did not use the aircraft before acquiring it and did not buy it from a related party.
The dollars add up quickly. On a $4 million aircraft used predominantly for business, a full 100% deduction means writing off the entire cost in year one. Under the old phase-down, that same purchase in 2025 would generally have produced a 40% deduction ($1.6 million), or 60% for an aircraft that qualified for the special one-year-delayed schedule. That gap is why the timing and structure of your purchase deserve close attention.
One transition rule still matters. For the first tax year ending after January 19, 2025, you can elect a reduced rate instead of the full deduction: 40% for most property and 60% for certain aircraft. Some buyers choose the lower rate to spread deductions into future high-income years. The right choice depends on your income picture, and it is worth reviewing the structure of your aircraft purchase agreement before you close.
Does Your Aircraft Have to Be Used for Business?
Yes, and this is where most deductions are won or lost. Business aircraft are treated as listed property under the tax code. To claim bonus depreciation, you must use the aircraft more than 50% for qualified business use in the year you place it in service. If business use is 50% or less, you cannot take bonus depreciation at all and must use the slower alternative depreciation system instead.
Qualified business use is narrower than many owners expect. It generally means trade-or-business use; some investment-type use may support depreciation but does not count toward the more-than-50% test.
Personal trips do not count, and neither do commuting flights. Leasing the aircraft to an owner who holds more than 5% of the business or to a related party (or providing the aircraft as compensation for their services) generally does not count as qualified business use. For service providers who are not owners or related parties, that use can still count if the value is reported as income and any required withholding is handled.
Careful records of every flight, including passengers and business purpose, separate a defensible deduction from a disallowed one.
What Happens If Business Use Drops Later?
Claiming the deduction in year one does not end your obligations. If your aircraft qualifies the first year but business use falls to 50% or less in a later year, the tax code requires you to recapture the excess depreciation, adding back the difference between what you deducted and what the slower method would have allowed, as income in the year use declines.
Recapture can produce a large, unexpected tax bill years after the purchase. It often surprises owners who shift an aircraft toward personal travel, charter use, or international operations without checking the tax consequences first. A long-term usage plan, set before you buy, is the best protection.
What If I Bought My Aircraft Before January 2025?
The phase-down still controls aircraft acquired and placed in service before the January 19, 2025 cutoff. The permanent 100% rate is not retroactive, so older aircraft keep whatever rate applied when they were placed in service.
Under the prior schedule, certain qualifying aircraft received 100% through 2023, then 80% in 2024 and 60% in 2025, one year behind the steeper step-down that hit most other property. Not every aircraft got that extra year, though.
The delayed schedule applies only to aircraft meeting specific requirements, generally a nonrefundable deposit of the lesser of 10% of the cost or $100,000 at the time of contract, an estimated production period over four months, and a cost over $200,000. An aircraft that does not meet those tests was on the general schedule (80% in 2023, 60% in 2024, 40% in 2025). Those locked-in rates do not change because the law changed afterward.
Timing can be less obvious than it looks. A written binding contract signed before the cutoff can fix your acquisition date as of the contract, even if the aircraft is delivered later. That means an aircraft you take delivery of in 2025 or 2026 could still fall under the older phase-down rates if you committed to buy it earlier. Cancellation periods and contingency clauses can shift that date too, so the contract terms, not just the delivery date, determine which rules apply.
If your purchase straddles the January 2025 line, the difference between the old rate and the permanent 100% deduction can be substantial. This is a fact-specific determination worth confirming before you file.
How Does Florida Treat Bonus Depreciation?
Florida does not follow the federal rules. The state requires corporate income taxpayers to add back the full bonus depreciation amount for assets placed in service before January 1, 2027, then recover it through equal subtractions over seven years.
So while you can deduct the entire aircraft cost in year one for federal purposes, Florida spreads that same deduction across seven returns. This addback applies to whatever federal bonus amount you actually claim, the full 100% or the elected 40% or 60% rate. Because this addback applies only to taxpayers subject to Florida’s corporate income tax, an aircraft owned individually or through certain pass-through entities may not be affected, but where it does apply, planning for both layers at once prevents an unwelcome state tax surprise.
Plan Your 2026 Aircraft Purchase With AvTax Advisors
The phase-down is gone, but the rules that protect your deduction are stricter than ever. Whether you are buying your first aircraft or restructuring an existing one, AvTax Advisors, PLLC can help you qualify for the full deduction, document business use correctly, and plan for Florida’s separate treatment. Contact AvTax Advisors today to schedule a consultation and protect your investment.