2026 Section 179 Tax Deduction Overview & Limits

The Section 179 tax deduction is designed to encourage small businesses to invest in qualifying equipment -- including many new Ram trucks -- by allowing them to claim all or some of an asset's purchase price as a deduction in the year it is placed into service. This incentive can apply to both new and used vehicles, as long as the vehicle in question meets specific IRS requirements. Understanding these limits and eligibility rules is the first step toward maximizing your tax savings for the 2026 tax year.

• 2026 Deduction Limit: $2,560,000¹
  • Good on new and used equipment (as long as new to the buyer).
  • Equipment can be purchased or leased.

• 2026 Spending Cap: $4,090,000¹ -- This is the maximum amount that can be spent on equipment.
  
  • Spend more than this and the deduction begins to be reduced on a dollar-for-dollar basis (making it a true small-business incentive).
  • Deduction is completely phased out at $6,650,000.

• 2026 Bonus Depreciation: 100%¹
  • Bonus Depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets.
  • It's generally taken after the Section 179 Spending Cap is reached.
  • Applies to both new and used vehicles.

• To Qualify for Section 179, a Vehicle Must Be:¹
  • Purchased and put into use before Dec. 31, 2026.
  • Used for business purposes more than 50% of the time.
  • Titled in the company's name (not the company's owner's name).

How Do I Use the Section 179 Tax Incentive?

Taking advantage of Section 179 starts with understanding your business needs and consulting with a qualified tax professional who can assess your specific situation. The vehicle must be used for business purposes more than 50% of the time and must be titled in your company's name, not your personal name.

Once you've identified a qualifying vehicle, you'll work with your accountant to claim the deduction when you file your taxes. It's important to note that this content is for informational purposes only and should not be considered tax advice. Always consult a licensed CPA or tax advisor before making any purchasing decisions based on tax incentives.