Instructions for Form 2106

2025

Instructions for Form 2106

Employee Business Expenses

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

section 168(k) additional first-year depreciation deduction

applies is $12,200 for the 1st tax year, $19,600 for the 2nd

tax year, $11,800 for the 3rd tax year, and $7,060 for each

succeeding year. (See Rev. Proc. 2025-16.)

What’s New

Note: The section 168(k) additional first-year

depreciation deduction is sometimes called special

depreciation allowance.

See https://www.irs.gov/form2106 for the latest

developments related to Form 2106 and its instructions.

Standard mileage rate. The 2025 per mile rate for

business use of your vehicle is 70 cents (0.70). (See

Notice 2025-05.)

Depreciation limits on vehicles. The depreciation limits

apply under section 179 and section 280F.

Under section 179. For tax years beginning in 2025,

the aggregate cost of any section 179 property that a

taxpayer elects to treat as an expense cannot exceed

$2,500,000. The $2,500,000 limitation is reduced (but not

below zero) by the amount by which the cost of section

179 property placed in service during the 2025 tax year

exceeds $4,000,000. The cost of any sport utility vehicle

(SUV) that may be taken into account under section 179

cannot exceed $31,300. (See Rev. Proc. 2024-40.)

Under section 280F. The depreciation limitations for

passenger automobiles acquired after September 27,

2017, and placed in service during calendar year 2025, for

which the section 168(k) additional first-year depreciation

deduction applies, is $20,200 for the 1st tax year, $19,600

for the 2nd tax year, $11,800 for the 3rd tax year, and

$7,060 for each succeeding year.

The depreciation limitations for passenger automobiles

placed in service during calendar year 2025 for which no

General Instructions

Purpose of Form

Use Form 2106 if you were an Armed Forces reservist, a

qualified performing artist, a fee-basis state or local

government official, or an employee with

impairment-related work expenses. Employees who do

not fit into one of the listed categories may not use the

Form 2106 due to the termination of miscellaneous

itemized deductions subject to the 2% floor under section

67(a). Section 67(h) eliminated miscellaneous itemized

deductions for tax years beginning after 2017. See the

flowchart in these instructions to find out if you must file

this form.

Excess reimbursements. If you are not a member of

the Armed Forces reserves, a qualified performing artist, a

fee-basis state or local government official, or an

employee with impairment-related work expenses, and

receive reimbursements in excess of your expenses from

your employer’s nonaccountable plan, the excess

reimbursements should be included as wages on your

Form W-2 and your income tax return.

Who Must File Form 2106

A Were you employed during the tax year as an Armed

Forces reservist, a qualified performing artist, a fee-basis

state or local government official, or an individual with a

disability claiming impairment-related work expenses?

See the line 10 instructions for definitions.

No

Don’t file Form 2106 (see Notes below).

Yes

No

B Did you have job-related business expenses?

Don’t file Form 2106.

Yes

C Were you reimbursed for any of your business

expenses (count only reimbursements your employer

didn’t include in box 1 of your Form W-2)?

No

D Are you claiming job-related vehicle,

travel, transportation, meals, or

entertainment expenses?

No

Yes

E Did you use a vehicle in your job during the

tax year that you also used for business in a

prior year?

Yes

Yes

File Form 2106.

Nov 20, 2025

Don’t file Form 2106.

No

F Are your deductible expenses more than your

reimbursements (count only reimbursements your

employer didn’t include in box 1 of your Form W-2)?

For rules covering employer reporting of reimbursed

expenses, see the instructions for line 7.

G Is either (1) or (2) true?

1. You owned this vehicle and used the actual

expense method in the first year you used the

vehicle for business.

2. You used a depreciation method other than

straight line for this vehicle in a prior year.

Yes

File Form 2106 (see

Notes below).

No

Yes

File Form 2106.

No

Don’t file Form 2106.

Notes

• Armed Forces reservists, qualified performing artists,

fee-basis state or local government officials, and

individuals with disabilities should see the instructions

for line 10 to find out where to deduct employee

expenses.

• Form 2106 may be used only by Armed Forces

reservists, qualified performing artists, fee-basis

state or local government officials, and employees

with impairment-related work expenses because of

the elimination of miscellaneous itemized deductions

subject to the 2% floor under section 67(a) by

section 67(h).

Instructions for Form 2106 (2025) Catalog Number 64188V

Department of the Treasury Internal Revenue Service www.irs.gov

Recordkeeping

You can’t deduct expenses for travel (including meals

unless you used the standard meal allowance), gifts, or

use of a car or other listed property unless you keep

records to prove the time, place, business purpose,

business relationship (for gifts), and amounts of these

expenses. Generally, you must also have receipts for all

lodging expenses (regardless of the amount) and any

other expense of $75 or more. See section 274(d) and

Regulations sections 1.274-5 and 1.274-5T.

Additional Information

For more details about employee business expenses, see

the following.

• Pub. 463, Travel, Gift, and Car Expenses.

• Pub. 529, Miscellaneous Deductions.

• Pub. 587, Business Use of Your Home.

• Pub. 946, How To Depreciate Property.

Specific Instructions

Part I—Employee Business Expenses

and Reimbursements

Fill in all of Part I if you were reimbursed for employee

business expenses. If you weren’t reimbursed for your

expenses, complete steps 1 and 3 only.

Step 1—Enter Your Expenses

Line 1. If you were a rural mail carrier, you can treat the

amount of qualified reimbursement you received as the

amount of your allowable expense. Because the qualified

reimbursement is treated as paid under an accountable

plan, your employer shouldn’t include the amount of

reimbursement in your income.

You were a rural mail carrier if you were an employee of

the United States Postal Service (USPS) who performed

services involving the collection and delivery of mail on a

rural route.

Qualified reimbursements. These are the amounts

paid by the USPS as an equipment maintenance

allowance under a collective bargaining agreement

between the USPS and the National Rural Letter Carriers’

Association, but only if such amounts don’t exceed the

amount that would have been paid under the 1991

collective bargaining agreement (adjusted for changes in

the Consumer Price Index since 1991 as detailed in

section 162(o)(3)).

If you were a rural mail carrier, do not use Form

2106. Your employer should not include the

CAUTION amount of reimbursement in your income.

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Line 2. The expenses of commuting to and from work

aren’t deductible. See the line 15 instructions for the

definition of commuting.

Line 3. Enter lodging and transportation expenses

connected with overnight travel away from your tax home

(defined next). Don’t include expenses for meals. For

more details, including limits, see Pub. 463.

Tax home. Generally, your tax home is your regular or

main place of business or post of duty regardless of where

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you maintain your family home. If you don’t have a regular

or main place of business because of the nature of your

work, then your tax home may be the place where you

regularly live. If you don’t have a regular or a main place of

business or post of duty and there is no place where you

regularly live, you are considered an itinerant (a transient)

and your tax home is wherever you work. As an itinerant,

you are never away from home and can’t claim a travel

expense deduction. For more details on the definition of a

tax home, see Pub. 463.

Generally, you can’t deduct any expenses for travel

away from your tax home for any period of temporary

employment of more than 1 year. However, this 1-year rule

doesn’t apply for a temporary period in which you were a

federal employee certified by the Attorney General (or

designee) as traveling in temporary duty status for the

U.S. Government to investigate or prosecute a federal

crime (or to provide support services for the investigation

or prosecution of a federal crime).

Incidental expenses. The term “incidental expenses”

means fees and tips given to porters, baggage carriers,

hotel staff, and staff on ships.

You can use an optional method (instead of actual cost)

for deducting incidental expenses only. The amount of the

deduction is $5 a day. You can use this method only if you

didn’t pay or incur any meal expenses. You can’t use this

method on any day you use the standard meal allowance

(defined later in the instructions for line 5).

Line 4. Enter other job-related expenses not listed on any

other line of this form. Include expenses for business gifts,

education (tuition, fees, and books), trade publications,

etc. For details, including limits, see Pub. 463 and Pub.

529.

See Form 4562, Depreciation and Amortization, to

figure any depreciation and section 179 deduction to

include here.

Don’t include on line 4 any educator expenses you

deducted on Schedule 1 (Form 1040), line 11.

You may be able to take a credit for your

TIP educational expenses instead of a deduction. See

Form 8863, Education Credits, for details.

Don’t include expenses for meals, taxes, or interest on

line 4. See Schedule A (Form 1040), Itemized Deductions,

and Schedule 1-A (Form 1040), Additional Deductions, to

see whether you can deduct taxes or interest paid or

accrued during the year.

Note: If line 4 is your only entry, don’t complete Form

2106 unless you are claiming:

• Performing-arts-related business expenses as a

qualified performing artist,

• Expenses for performing your job as a fee-basis state or

local government official, or

• Impairment-related work expenses as an individual with

a disability.

Note: No deduction is allowed for certain entertainment

expenses, membership dues, and facilities used in

connection with these activities for amounts paid or

incurred after 2017. (See section 274.)

Instructions for Form 2106 (2025)

Line 5. Enter your allowable meals expense. Include

meals while away from your tax home overnight and other

business meals.

Standard meal allowance. Instead of actual cost, you

may be able to claim the standard meal allowance for your

daily meals and incidental expenses (M&IE) while away

from your tax home overnight. Under this method, instead

of keeping records of your actual meal expenses, you

deduct a specified amount, depending on where you

travel. However, you must still keep records to prove the

time, place, and business purpose of your travel.

The standard meal allowance is the federal M&IE rate.

You can find the rates that applied during 2025 on the

Internet at GSA.gov/perdiem. At the Per Diem Overview

page, select “2025” for the rates in effect for the period

January 1, 2025–September 30, 2025, select “Fiscal Year

2026” for the period October 1, 2025–December 31, 2025.

However, you can apply the rates in effect before October

1, 2025, for expenses of all travel within the United States

for 2025 instead of the updated rates. For the period

October 1, 2025–December 31, 2025, you must

consistently use either the rates for the first 9 months of

2025 or the updated rates.

The Department of Defense sets rates for Alaska,

Hawaii, and U.S. associated territories. See travel.dod.mil/

Travel-Transportation-Rates/Per-Diem/Per-Diem-RateLookup/.

The State Department sets foreign rates. See

aoprals.state.gov/web920/per_diem.asp.

See Pub. 463 for details on how to figure your

deduction using the standard meal allowance, including

special rules for partial days of travel and transportation

workers.

• Your employer reimbursed you for vehicle expenses at

the standard mileage rate or according to a flat rate or

stated schedule, and you verified the date of each trip,

mileage, and business purpose of the vehicle use.

See Pub. 463 for more details.

Allocating your reimbursement. If your employer

paid you a single amount that covers meals as well as

other business expenses, you must allocate the

reimbursement so that you know how much to enter in

column A and column B of line 7. Use the following

worksheet to figure this allocation.

Step 2—Enter Reimbursements Received From

Your Employer for Expenses Listed in Step 1

Step 3—Figure Expenses To Deduct

Line 7. Enter reimbursements received from your

employer (or third party) for expenses shown in Step 1;

include reimbursements reported in Form W-2, Box 12,

code L. Do not include amounts reported in Form W-2,

Box 1.

Generally, when your employer pays for your expenses,

the payments shouldn’t be included in box 1 of your Form

W-2 if, within a reasonable period of time, you:

• Accounted to your employer for the expenses; and

• Were required to return, and did return, any payment

not spent (or considered not spent) for business

expenses.

If these payments were incorrectly included in box 1,

ask your employer for a corrected Form W-2.

Accounting to your employer. This means that you

gave your employer documentary evidence in the form of

a statement of expense, account book, diary, log,

statement of expenses, trip sheets, or similar statement to

verify the amount, time, place, and business purpose of

each expense. You are also treated as having accounted

for your expenses if either of the following applies.

• Your employer gave you a fixed travel allowance that is

similar in form to the per diem allowance specified by the

federal government and you verified the time, place, and

business purpose of the travel for that day.

Instructions for Form 2106 (2025)

Reimbursement Allocation Worksheet

(keep for your records)

1. Enter the total amount of reimbursements

your employer gave you that weren’t

reported to you

in Form W-2, box 1 . . . . . . . . . . . . . . .

2. Enter the total amount of your expenses for

the periods covered by this

reimbursement . . . . . . . . . . . . . . . . . .

3. Enter the part of the amount on line 2 that

was your total expense for meals . . . . . .

4. Divide line 3 by line 2.

Enter the result as a decimal (rounded to

three places) . . . . . . . . . . . . . . . . . . .

.

5. Multiply line 1 by line 4. Enter the result here

and

in column B, line 7 . . . . . . . . . . . . . . .

6. Subtract line 5 from line 1. Enter the result

here and

in column A, line 7 . . . . . . . . . . . . . . .

Line 9. Generally, you can deduct only 50% of your

business meal expenses, including meals incurred while

away from home on business. Meals that are not

separately stated from entertainment are generally

nondeductible.

Line 10. If you are one of the individuals discussed

below, special rules apply to deducting your employee

business expenses.

Armed Forces reservist (member of a reserve

component). You are a member of a reserve component

of the Armed Forces of the United States if you are in the

Army, Navy, Marine Corps, Air Force, or Coast Guard

Reserve; the Army National Guard of the United States;

the Air National Guard of the United States; or the

Reserve Corps of the Public Health Service.

If you qualify, complete Form 2106 and include the part

of the line 10 amount attributable to the expenses for

travel more than 100 miles away from home in connection

with your performance of services as a member of the

reserves on Schedule 1 (Form 1040), line 12, and attach

Form 2106 to your return. The amount of expenses you

can deduct on Schedule 1 (Form 1040), line 12, is limited

to the regular federal per diem rate (for lodging, meals,

and incidental expenses) and the standard mileage rate

(for car expenses), plus any parking fees, ferry fees, and

3

tolls. These reserve-related travel expenses are

deductible whether or not you itemize deductions. See

Pub. 463 for additional details on how to report these

expenses.

Fee-basis state or local government official. You

are a qualifying fee-basis official if you are employed by a

state or political subdivision of a state and are

compensated, in whole or in part, on a fee basis.

If you qualify, include the part of the line 10 amount

attributable to the expenses you paid or incurred for

services performed in that job in the total on Schedule 1

(Form 1040), line 12, and attach Form 2106 to your return.

These employee business expenses are deductible

whether or not you itemize deductions.

Qualified performing artist. You are a qualified

performing artist if you:

1. Performed services in the performing arts as an

employee for at least two employers during the tax year,

2. Received from at least two of those employers

wages of $200 or more per employer,

3. Had allowable business expenses attributable to the

performing arts of more than 10% of gross income from

the performing arts, and

4. Had adjusted gross income of $16,000 or less

before deducting expenses as a performing artist.

In addition, if you are married, you must file a joint return

unless you lived apart from your spouse for all of 2025. If

you file a joint return, you must figure requirements (1),

(2), and (3) separately for both you and your spouse.

However, requirement (4) applies to the combined

adjusted gross income of both you and your spouse.

If you meet all the requirements for a qualified

performing artist, include the part of the line 10 amount

attributable to performing-arts-related expenses in the

total on Schedule 1 (Form 1040), line 12, and attach Form

2106 to your return. Your performing-arts-related business

expenses are deductible whether or not you itemize

deductions.

Disabled employee with impairment-related work

expenses. Impairment-related work expenses are the

allowable expenses of an individual with physical or

mental disabilities for attendant care at their place of

employment. They also include other expenses in

connection with the place of employment that enable the

employee to work. See Pub. 463 for more details.

If you qualify, enter the part of the line 10 amount

attributable to impairment-related work expenses on

Schedule A (Form 1040), line 16 (or Schedule A (Form

1040-NR), line 7).

Part II—Vehicle Expenses

There are two methods for figuring vehicle expenses—the

standard mileage rate and the actual expense method.

You can use the standard mileage rate for 2025 only if:

• You owned the vehicle and used the standard mileage

rate for the first year you placed the vehicle in service, or

• You leased the vehicle and are using the standard

mileage rate for the entire lease period (except the period,

if any, before 1998).

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You can’t use actual expenses for a leased vehicle if

you previously used the standard mileage rate for that

vehicle.

If you have the option of using either the standard

mileage rate or actual expense method, you should figure

your expenses both ways to find the method most

beneficial to you. But, when completing Form 2106, fill in

only the sections that apply to the method you choose.

If you were a rural mail carrier and received an

equipment maintenance allowance, see the line 1

instructions.

For more information on the standard mileage rate and

actual expenses, see Pub. 463.

Section A—General Information

If you used two vehicles for business during the year, use

a separate column in Sections A, C, and D for each

vehicle. If you used more than two vehicles, complete and

attach a second Form 2106, page 2.

Line 11. Date placed in service is generally the date you

first start using your vehicle. However, if you first start

using your vehicle for personal use and later convert it to

business use, the vehicle is treated as placed in service

on the date you start using it for business.

Line 12. Enter the total number of miles you drove each

vehicle during 2025.

Change from personal to business use. If you

converted your vehicle during the year from personal to

business use (or vice versa) and you don’t have mileage

records for the time before the change to business use,

enter the total number of miles driven after the change to

business use.

Line 13. Don’t include commuting miles on this line;

commuting miles aren’t considered business miles. See

the line 15 instructions for the definition of commuting.

Line 14. Divide line 13 by line 12 to figure your business

use percentage.

Change from personal to business use. If you

entered on line 12 the total number of miles driven after

the change to business use, multiply the percentage you

figured by the number of months you drove the vehicle for

business and divide the result by 12.

Line 15. Enter your average daily round-trip commuting

distance. If you went to more than one work location,

figure the average.

Commuting. Generally, commuting is travel between

your home and a work location. However, travel that meets

any of the following conditions isn’t commuting.

• You have at least one regular work location away from

your home and the travel is to a temporary work location in

the same trade or business, regardless of the distance.

Generally, a temporary work location is one where your

employment is expected to last 1 year or less. See Pub.

463 for more details.

• The travel is to a temporary work location outside the

metropolitan area where you live and normally work.

• Your home is your principal place of business under

section 280A(c)(1)(A) (for purposes of deducting

expenses for business use of your home) and the travel is

Instructions for Form 2106 (2025)

to another work location in the same trade or business,

regardless of whether that location is regular or temporary

and regardless of distance.

renting. Also, include on this line any temporary rentals,

such as when your car was being repaired, except for

amounts included on line 3.

Line 16. If you don’t know the total actual miles you used

your vehicle for commuting during the year, figure the

amount to enter on line 16 by multiplying the number of

days during the year that you used each vehicle for

commuting by the average daily round-trip commuting

distance in miles. However, if you converted your vehicle

during the year from personal to business use (or vice

versa), enter your commuting miles only for the period you

drove your vehicle for business.

Line 24b. If you leased a vehicle for a term of 30 days or

more, you may have to reduce your deduction for vehicle

lease payments by an amount called the inclusion

amount. You may have an inclusion amount for a

passenger automobile if:

Section B—Standard Mileage Rate

You may be able to use the standard mileage rate instead

of actual expenses to figure the deductible costs of

operating a passenger vehicle, including a van, an SUV, a

pickup, or a panel truck.

If you want to use the standard mileage rate for a

vehicle you own, you must do so in the first year you place

your vehicle in service. In later years, you can deduct

actual expenses instead, but you must use straight line

depreciation.

If you lease your vehicle, you can use the standard

mileage rate, but only if you use the rate for the entire

lease period (except for the period, if any, before January

1, 1998).

If you use more than two vehicles, complete and attach

a second Form 2106, page 2, providing the information

requested in lines 11 through 22. Be sure to include the

amount from line 22 of both pages in the total on Form

2106, line 1. You may not use the standard mileage rate to

compute the deductible expenses of five or more vehicles

you own or lease simultaneously (such as in fleet

operations).

You may be able to deduct state and local personal

property taxes you paid or accrued during the year. Enter

these taxes on Schedule A (Form 1040), line 5c.

If you are claiming the standard mileage rate for

mileage driven in more than one business activity, you

must figure the deduction for each business on a separate

form or schedule (for example, Form 2106; Schedule C

(Form 1040), Profit or Loss From Business; Schedule E

(Form 1040), Supplemental Income and Loss; or

Schedule F (Form 1040), Profit or Loss From Farming).

Section C—Actual Expenses

Line 23. Enter your total annual expenses for gasoline,

oil, repairs, insurance, tires, license plates, and similar

items. Don't include state and local personal property

taxes or vehicle loan interest you paid on Line 23. You may

be able to deduct state and local personal property taxes

you paid or accrued during the year. See Schedule A

(Form 1040) to see whether you can deduct these taxes.

Additionally, you may be able to deduct qualified

passenger vehicle loan interest you paid or accrued

during the year. See Schedule 1-A (Form 1040) to see

whether you can deduct this interest.

Line 24a. If, during 2025, you rented or leased a vehicle

instead of using your own vehicle, enter the cost of

Instructions for Form 2106 (2025)

Passenger Automobiles (Including Trucks and Vans)

The lease term began in:

And the vehicle’s fair market

value on the first day of the

lease exceeded:

2025 . . . . . . . . . . . . . . .

$ 62,000 (See Rev. Proc. 2025-16)

2024 . . . . . . . . . . . . . . .

$ 62,000 (See Rev.Proc. 2024-13)

2023 . . . . . . . . . . . . . . .

$ 60,000 (See Rev. Proc. 2023-14)

2022 . . . . . . . . . . . . . . .

$ 56,000 (See Rev. Proc. 2022-17)

2021 . . . . . . . . . . . . . . .

$ 51,000 (See Rev. Proc. 2021-31)

See Pub. 463 for leases beginning before 2021.

See Pub. 463 to figure the inclusion amount.

Line 25. If during 2025 your employer provided a vehicle

for your business use and included 100% of its annual

lease value in Form W-2, box 1, enter this amount on

line 25. If less than 100% of the annual lease value was

included in Form W-2, box 1, skip line 25.

Line 28. If you completed Section D, enter the amount

from line 38. If you used Form 4562 to figure your

depreciation deduction, enter the total of the following

amounts.

• Depreciation allocable to your vehicle(s) (from Form

4562, line 28).

• Any section 179 deduction allocable to your vehicle(s)

(from Form 4562, line 29).

Section D—Depreciation of Vehicles

Depreciation is an amount you can deduct to recover the

cost or other basis of your vehicle over a certain number

of years. In some cases, you can claim a special

depreciation allowance or elect to expense part of the cost

of your vehicle in the year of purchase. For details, see

Pub. 463.

Line 30. Enter the vehicle’s actual cost or other basis.

Don’t reduce your basis by any prior year’s depreciation.

However, you must reduce your basis by any deductible

casualty loss, deduction for clean-fuel vehicle, gas guzzler

tax, alternative motor vehicle credit, or qualified plug-in

electric vehicle credit you claimed. Increase your basis by

any sales tax paid (unless you deducted sales taxes in the

year you purchased your vehicle) and any substantial

improvements to your vehicle.

If you converted the vehicle from personal use to

business use, your basis for depreciation is the smaller of

the vehicle’s adjusted basis or its fair market value on the

date of conversion.

Line 31. Enter the amount of any section 179 deduction

and, if applicable, any special depreciation allowance

claimed for this year.

Section 179 deduction. If 2025 is the first year your

vehicle was placed in service and the percentage on

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line 14 is more than 50%, you can elect to deduct as an

expense a portion of the cost (subject to a yearly limit).

This cost is sometimes referred to as the “Section 179

basis.” To figure this section 179 deduction, multiply the

part of the cost of the vehicle that you choose to expense

by the percentage on line 14. The total of your

depreciation and section 179 deduction generally can’t be

more than the percentage on line 14 multiplied by the

applicable limit explained in the line 36 instructions. Your

section 179 deduction for the year can’t be more than the

income from your job and any other active trade or

business on your Form 1040 or 1040-SR.

Note: A deduction allowed under section 179 may be

subject to the limitations of section 280F. (See section

280F.)

If you are claiming a section 179 deduction on

other property, or you placed more than

CAUTION $4,000,000 of section 179 property in service

during the year, use Form 4562 to figure your section 179

deduction. Enter the amount of the section 179 deduction

allocable to your vehicle from Form 4562, line 12, on Form

2106, line 31.

!

Example.

Section 179 basis . . . . . . . . . . . . . . . . . . . . . . .

$25,000

Limit on depreciation and section 179

deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,200*

Smaller of:

Note: A vehicle subject to section 280F(a) is not

considered an SUV under section 179. (See section 179.)

Special depreciation allowance. The special

depreciation allowance applies only for the first year a

vehicle is placed in service. See section 168(k) and Rev.

Proc. 2025 -16. For 2025, your total section 179

deduction, special depreciation allowance, and regular

depreciation deduction can’t be more than $20,200 for

passenger automobiles, multiplied by your business use

percentage on line 14. See the line 36 instructions for

depreciation limits. You can’t recover the amount by which

your depreciation deduction exceeds the depreciation

limits for the year placed in service until after the end of

the recovery period for your vehicle.

Use the following worksheet to figure the amount of the

special depreciation allowance.

Worksheet for the Special Depreciation Allowance

(keep for your records)

1. Enter the total amount from Form 2106,

line 30 . . . . . . . . . . . . . . . . . . . . . . . .

2. Multiply line 1 by the percentage on Form

2106, line 14, and enter the result . . . . . .

3. Enter any section 179 deduction

. . . . . . .

4. Subtract line 3 from line 2 . . . . . . . . . . . .

5. Multiply the applicable limit explained in the

line 36 instructions by the percentage on

Form 2106, line 14, and enter the result . .

Section 179 basis, or limit on

depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,200

6. Subtract line 3 from line 5 . . . . . . . . . . . .

Percentage on line 14 . . . . . . . . . . . . . . . . . . .

× 0.75

Section 179 deduction . . . . . . . . . . . . . . . . . . .

$15,150

7. Enter the smaller of line 4 or line 6. Add the

result to any section 179 deduction (line 3

above) and enter the total on Form 2106,

line 31 . . . . . . . . . . . . . . . . . . . . . . . .

* $12,200 if electing out of special depreciation allowance or not

qualified property.

Limit for sport utility and certain other vehicles.

For sport utility and certain other vehicles placed in

service in 2025, the portion of the vehicle’s cost taken into

account in figuring your section 179 deduction is limited to

$31,300. This rule applies to any 4-wheeled vehicle

primarily designed or used to carry passengers over

public streets, roads, or highways that isn’t subject to any

of the passenger automobile limits explained in the line 36

instructions and is rated at no more than 14,000 pounds

gross vehicle weight. However, the $31,300 limit doesn’t

apply to any vehicle:

• Designed to have a seating capacity of more than nine

persons behind the driver’s seat;

• Equipped with a cargo area of at least 6 feet in interior

length that is an open area or is designed for use as an

open area but is enclosed by a cap and isn’t readily

accessible directly from the passenger compartment; or

• That has an integral enclosure, fully enclosing the driver

compartment and load carrying device, doesn’t have

seating rearward of the driver’s seat, and has no body

section protruding more than 30 inches ahead of the

leading edge of the windshield.

6

Note: For certain qualified property acquired after

September 27, 2017, and before January 20, 2025, that is

placed in service during calendar year 2025, the special

depreciation allowance is 40% (60% for certain property

with a long production period and certain aircraft). For

certain qualified property acquired after January 19, 2025,

the special depreciation allowance is 100%. See Pub. 946

for prior years.

Election out. You can elect not to claim the special

depreciation allowance for your vehicle. If you make this

election, it applies to all property in the same class placed

in service during the year.

To make the election, attach a statement to your timely

filed return (including extensions) indicating that you are

electing not to claim the special depreciation allowance

and the class of property for which you are making the

election.

Line 32. To figure the basis for depreciation, multiply

line 30 by the percentage on line 14. From that result,

subtract the total amount of any section 179 deduction

and special depreciation allowance claimed this year (see

line 31) or any section 179 deduction and special

depreciation allowance claimed in any previous year for

this vehicle.

Instructions for Form 2106 (2025)

Depreciation Method and Percentage Chart—Line 33

Date Placed in Service

(a)1

(b)1

(c)

Oct. 1 – Dec. 31, 2025

200 DB

5.0%

150 DB

3.75%

SL

2.5%

Jan. 1 – Sept. 30, 2025

200 DB

20.0

150 DB

15.0

SL

10.0

Oct. 1 – Dec. 31, 2024

200 DB

38.0

150 DB

28.88

SL

20.0

Jan. 1 – Sept. 30, 2024

200 DB

32.0

150 DB

25.5

SL

20.0

Oct. 1 – Dec. 31, 2023

200 DB

22.8

150 DB

20.21

SL

20.0

Jan. 1 – Sept. 30, 2023

200 DB

19.2

150 DB

17.85

SL

20.0

Oct. 1 – Dec. 31, 2022

200 DB

13.68

150 DB

16.4

SL

20.0

Jan. 1 – Sept. 30, 2022

200 DB

11.52

150 DB

16.66

SL

20.0

Oct. 1 – Dec. 31, 2021

200 DB

10.94

150 DB

16.41

SL

20.0

Jan. 1 – Sept. 30, 2021

200 DB

11.52

150 DB

16.66

SL

20.0

Oct. 1 – Dec. 31, 2020

200 DB

9.58

150 DB

14.35

SL

17.5

Jan. 1 – Sept. 30, 2020

200 DB

5.76

150 DB

8.33

SL

10.0

Prior to 20202

You can use this column only if the business use of your car is more than 50%.

If your car was subject to the maximum limits for depreciation and you have unrecovered basis in the car, you can continue to claim depreciation.

See Pub. 463 for more information.

1

2

Line 33. If you used the standard mileage rate in the first

year the vehicle was placed in service and now elect to

use the actual expense method, you must use the straight

line method of depreciation for the vehicle’s estimated

useful life. Otherwise, use the Depreciation Method and

Percentage Chart, later, to find the depreciation method

and percentage to enter on line 33.

To use the chart, first find the date you placed the

vehicle in service (line 11). Then, select the depreciation

method and percentage from column (a), (b), or (c). For

example, if you placed a car in service on July 1, 2025 and

you use the method in column (a), enter “200 DB 20%” on

line 33.

For vehicles placed in service before 2025, use the

same method you used on last year’s return unless a

decline in your business use requires a change to the

straight line method. For vehicles placed in service during

2025, select the depreciation method and percentage

after reading the explanation for each column.

Column (a)—200% declining balance method. You

can use column (a) only if the business use percentage on

line 14 is more than 50%. Of the three depreciation

methods, the 200% declining balance method may give

you the largest depreciation deduction for the first 3 years

(after considering the depreciation limit for your vehicle).

See the depreciation limit tables, later.

Column (b)—150% declining balance method. You

can use column (b) only if the business use percentage on

line 14 is more than 50%. The 150% declining balance

method may give you a smaller depreciation deduction

than in column (a) for the first 3 years.

Column (c)—straight line method. You must use

column (c) if the business use percentage on line 14 is

50% or less. The method for these vehicles is the straight

Instructions for Form 2106 (2025)

line method over 5 years. The use of this column is

optional for these vehicles if the business use percentage

on line 14 is more than 50%.

Note: If your vehicle was used more than 50% for

business in the year it was placed in service and used

50% or less in a later year, part of the depreciation,

section 179 deduction, and special depreciation

allowance previously claimed may have to be added back

to your income in the later year. Figure the amount to be

included in income in Form 4797, Part IV.

More information. For more information on

depreciating your vehicle, see Pub. 463.

If you placed other business property in service in

the same year you placed your vehicle in service

CAUTION or you used your vehicle mainly within an Indian

reservation, you may not be able to use the chart. See

Pub. 946 to figure your depreciation.

!

Line 34. If you sold or exchanged your vehicle during the

year, use the following instructions to figure the amount to

enter on line 34.

If your vehicle was placed in service:

1. Before 2020, enter the result of multiplying line 32

by the percentage on line 33;

2. After 2019, from January 1 through September 30,

enter the amount figured by multiplying the result in (1) by

50%; or

3. After 2019, from October 1 through December 31,

enter the amount figured by multiplying the result in (1) by

the percentage shown below for the month you disposed

of the vehicle.

7

Month of Disposal

Percentage

Jan., Feb., March . . . . . . . . . . . . . . .

12.5%

April, May, June . . . . . . . . . . . . . . . .

37.5%

July, Aug., Sept. . . . . . . . . . . . . . . . .

62.5%

Oct., Nov., Dec.

87.5%

. . . . . . . . . . . . . . . .

Line 36. See the tables shown here to determine the

depreciation limitation for passenger automobiles placed

in service in 2025. See the tables in Pub. 463 to determine

the depreciation limitation for passenger automobiles

placed in service before 2025.

• A passenger automobile is a 4-wheeled vehicle

manufactured primarily for use on public roads that is

rated at 6,000 pounds unloaded gross vehicle weight or

less. Certain vehicles, such as ambulances, hearses, and

taxicabs, aren’t considered passenger automobiles and

aren’t subject to the line 36 limits. See Pub. 463 for more

details.

• A truck or van is a passenger automobile that is

classified by the manufacturer as a truck or van, and that

is rated at 6,000 pounds gross vehicle weight or less.

If your vehicle isn’t subject to any of the line 36 limits,

skip lines 36 and 37, and enter the amount from line 35 on

line 38.

Rev. Proc. 2025-16 Table 2: Depreciation

Limitations for Passenger Automobiles Placed in

Service During Calendar Year 2025 for Which No

Section 168(k) Additional First-Year Depreciation

Deduction Applies

Tax Year

Amount

1st Tax Year . . . . . . . . . . . . . .

$ 12,200

2nd Tax Year . . . . . . . . . . . . . .

$ 19,600

3rd Tax Year . . . . . . . . . . . . . .

$ 11,800

Each Succeeding Year

$ 7,060

. . . . . . .

Paperwork Reduction Act Notice. For the Paperwork

Reduction Act Notice, see your tax return instructions.

Rev. Proc. 2025-16 Table 1: Depreciation

Limitations for Passenger Automobiles Acquired

After September 27, 2017, and Placed in Service

During Calendar Year 2025, for Which the Section

168(k) Additional First-Year Depreciation

Deduction Applies

Tax Year

Amount

1st Tax Year . . . . . . . . . . . . . .

$ 20,200

2nd Tax Year . . . . . . . . . . . . . .

$ 19,600

3rd Tax Year . . . . . . . . . . . . . .

$ 11,800

Each Succeeding Year

$ 7,060

8

. . . . . . .

Instructions for Form 2106 (2025)