What is Section 179?
Section 179 of the Internal Revenue Code allows businesses to deduct the full purchase price of qualifying equipment in the year it is placed in service, rather than depreciating it over several years. For 2026, the deduction limit is $1,220,000. Commercial and industrial generators qualify as business equipment under this provision.
How Much Can You Save?
Example: Your business purchases a Generac 60 kW standby generator for $28,000 including installation. With Section 179, you deduct the entire $28,000 in the year of purchase. At a 25% effective tax rate, that is a $7,000 tax saving in year one. At 32%, it is $8,960.
What Qualifies?
The generator must be purchased and placed in service during the tax year, used for business purposes more than 50% of the time, and your total equipment purchases must be under the spending cap. Installation costs including transfer switches and electrical work can also be included.
Bonus Depreciation
For 2026, bonus depreciation allows an additional 20% deduction on new equipment costs. Combined with Section 179, the total tax benefit can be substantial.
Act Before Year-End
Equipment must be placed in service before December 31. Given that commercial installations take 4-8 weeks, plan ahead. Always consult your tax professional.
