On February 20, 2026 (IR-2026-25) Treasury and the IRS issued Notice 2026-16, interim guidance on OBBBA's new special depreciation allowance for qualified production property (QPP). Taxpayers may elect to deduct up to 100% of the basis of nonresidential real property used in manufacturing, refining, chemical or agricultural production placed in service after July 4, 2025 and before January 1, 2031.
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IRS Notice 2026-16 lets manufacturers expense up to 100% of new production property
Why this matters for founders
Hardware and manufacturing founders building or buying US production facilities should model the 100% first-year QPP deduction now and document the 'substantial transformation' use to qualify.
Source: IRS (Internal Revenue Service)
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