PRIA Logo™
Title 26, Internal Revenue CodeRelease 119-110

§1397A Increase in Expensing Under Section 179

Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter U — Designation and Treatment of Empowerment Zones, Enterprise Communities, and Rural Development Investment Areas › PART III — ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES › Subpart B — Additional Expensing › § 1397A

Last updated Sep 22, 2026|Official source

Summary

Gives businesses in enterprise zones a bigger Section 179 deduction. The usual Section 179 limit is increased by the smaller of $35,000 or the cost of qualified zone property placed in service that year. For qualified zone property, only 50 percent of its cost is counted for this special amount. If the property stops being used in an empowerment zone, similar recapture rules apply. These rules do not apply to property placed in service after December 31, 2020.

Full Legal Text

Title 26, §1397A

Internal Revenue Code, Source: USLM XML via OLRC

(a)General rule
In the case of an enterprise zone business, for purposes of section 179—
(1)the limitation under section 179(b)(1) shall be increased by the lesser of—
(A)$35,000, or
(B)the cost of section 179 property which is qualified zone property placed in service during the taxable year, and
(2)the amount taken into account under section 179(b)(2) with respect to any section 179 property which is qualified zone property shall be 50 percent of the cost thereof.
(b)Recapture
Rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified zone property which ceases to be used in an empowerment zone by an enterprise zone business.
(c)Termination
This section shall not apply to any property placed in service in taxable years beginning after December 31, 2020.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2020—Subsec. (c). Pub. L. 116–260 added subsec. (c). 2000—Subsec. (a)(1)(A). Pub. L. 106–554, § 1(a)(7) [title I, § 114(a)], substituted “$35,000” for “$20,000”. Subsec. (c). Pub. L. 106–554, § 1(a)(7) [title I, § 114(b)], struck out heading and text of subsec. (c). Text read as follows: “For purposes of this section, qualified zone property shall not include any property substantially all of the use of which is in any parcel described in section 1391(g)(3)(A)(iii).” 1997—Subsec. (c). Pub. L. 105–34 added subsec. (c).

Statutory Notes and Related Subsidiaries

Effective Date

2020 AmendmentAmendment by Pub. L. 116–260 applicable to taxable years beginning after Dec. 31, 2020, see section 118(e) of div. EE of Pub. L. 116–260, set out as a note under section 1391 of this title.

Effective Date

of 2000 Amendment Pub. L. 106–554, § 1(a)(7) [title I, § 114(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–601, provided that: “The

Amendments

made by this section [amending this section] shall apply to taxable years beginning after December 31, 2001.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 1397A

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110