What is the Section 179 deduction limit for 2026?

The Section 179 deduction limit for 2026 is $1,220,000 for qualifying commercial kitchen equipment. See rates.

The specifics

For 2026, the IRS allows a full Section 179 deduction of $1,220,000 on qualifying commercial kitchen equipment, such as ovens, ranges, and hoods. The deduction is taken in the year the gear is placed in service, and if you purchase more than the limit, the excess is depreciated over five years under the MACRS schedule​[section179.org]​. This figure is higher than the previous year by roughly 5 % and follows the inflation‑adjustment rule set by the Treasury​[section179.org]​. The 2026 restaurant equipment financing approval study shows that lenders routinely factor this tax incentive into loan pricing. To gauge how the deduction might impact your tax bracket, try our affordability calculator.

Qualification & edge cases

Eligibility hinges on the gear being “qualified property” used primarily for business production or sale​[section179.org]​. If your taxable income is insufficient to absorb the full $1,220,000 deduction, the unused portion can be carried forward to future years. Borrowers on the margin—such as those owning restaurants that have operated for only a year or have cash‑flow gaps—may find it harder to secure financing, even if the equipment qualifies for Section 179. In such cases, lenders often require a higher down payment (typically 15–20 %) and a shorter loan term (48–72 months) to offset risk​[nav.com]​,​[bankrate.com]​. The phase‑out threshold starts at $1,400,000; beyond this, the deduction tapers to zero by $1,500,000​[section179.org]​.

Background & how it works

Section 179 was introduced in 1982 to motivate small‑business investment by allowing the full purchase price of certain assets to be written off in the year of acquisition. Each year the limit is adjusted for inflation, which is why the 2026 ceiling sits at $1,220,000​[section179.org]​. Because this deduction reduces taxable income immediately, it can improve a restaurant’s cash flow, but it also limits the amount of depreciation available in later years. Lenders, especially those offering commercial kitchen equipment financing, view the deduction as a key incentive that can lower effective interest rates by reducing a business’s tax liability​U.S. Bank​. For owners in Tacoma, see the comprehensive guide on Tacoma Commercial Foodservice Equipment Financing and Leasing for local lender options.

Bottom line

You can write off up to $1,220,000 in 2026 for qualifying commercial kitchen equipment. Confirm your eligibility and view specific loan rates in a few minutes—no credit‑score hit.

Disclosures

This content is for educational purposes only and is not financial advice. commercialkitchenfinancing.com may receive compensation from partner lenders, which may influence which products are featured. Rates, terms, and availability vary by lender and applicant qualifications.

Sources

• section179.org
• nav.com
• bankrate.com
• U.S. Bank