Occasionally bonus depreciation is used as a stimulus tool by tax policy makers.

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Bonus depreciation is sometimes used as a tool to encourage businesses to invest and stimulate economic growth. For example, in response to the COVID-19 pandemic, the U.S. government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included an increase in bonus depreciation to 100% for qualified property placed in service between September 27, 2017 and January 1, 2023. This was meant to incentivize businesses to continue investing and spending during the economic downturn caused by the pandemic.

Occasionally Bonus Depreciation Is Used as a Stimulus Tool by Tax