2026 Filing Season: Key Tax Breaks and OBBB Opportunities for Florida Businesses
The One Big Beautiful Bill (OBBB) is significantly shifting the tax landscape for American businesses — and for Florida business owners, the 2026 filing season arrives with a rare combination of restored incentives, brand-new deductions, and strict new compliance requirements that demand attention right now. At Kal Onomato, our licensed CPA and tax advisory team breaks down every provision that matters for your 2026 return.
What the OBBB Means for Florida Business Taxpayers in 2026
While much of the public focus has remained on individual tax breaks, the OBBB delivers a substantial set of benefits specifically for businesses — restoring and making permanent several high-value incentives that had either phased down or expired. At the same time, the legislation introduces critical new compliance requirements around payroll reporting, and the multi-state conformity landscape creates hidden tax traps for businesses operating across state lines.
Understanding which provisions benefit your business, and which create new obligations, is the essential first step before finalizing your 2026 filing strategy. Our tax advisory team at Kal Onomato works with Florida businesses of every size and structure to model the full impact of these changes before any return is filed. Visit our services page to see the full range of advisory support available, or review real client outcomes on our client stories page.
100% Bonus Depreciation — Restored & Permanent
Full immediate deduction for eligible machinery, equipment, and certain property in the year of purchase. No more phase-down schedules. Long-term certainty for capital investment planning in Florida businesses.
R&D Expensing — Retroactive to Jan. 1, 2025
The hated 5-year amortization requirement is repealed. Full immediate expensing of domestic R&D costs is back, retroactive to Jan. 1, 2025, with flexible catch-up options for 2022–2024 capitalized costs.
Section 168(n) — 100% Manufacturing Building Deduction
A brand-new provision offering a 100% deduction for new qualified nonresidential manufacturing buildings in the U.S. — replacing the standard 39-year depreciation schedule entirely.
20% QBI Deduction — Made Permanent
Section 199A’s 20% Qualified Business Income deduction, previously set to expire, is now permanent. Florida S corps, LLCs, and partnerships benefit from long-term competitive rate certainty.
Section 163(j) — EBITDA Standard Restored
The OBBB permanently restores the EBITDA-based calculation for business interest deduction limits, replacing the more restrictive EBIT standard and significantly increasing interest deductibility for capital-intensive firms.
Section 1202 — Enhanced QSBS Gain Exclusion
The OBBB strengthens Qualified Small Business Stock rules by expanding the gain exclusion on sale, making equity investment in qualifying C corporations more attractive for founders and early investors.
100% Bonus Depreciation: Permanent, Immediate, and Fully Restored
One of the most impactful provisions of the OBBB for Florida businesses is the permanent restoration of 100% bonus depreciation. After several years of the scheduled phase-down — 80% in 2023, 60% in 2024, 40% in 2025 — the law now allows businesses to immediately deduct the full cost of eligible machinery, equipment, and certain property in the year of purchase. This change is permanent, providing the long-term certainty that Florida business owners need for capital investment planning.
For Florida manufacturing firms, construction companies, healthcare operators, and any capital-intensive business, this provision changes the economics of equipment purchases in 2026 and beyond. Our financial management advisory team models the after-tax return on capital purchases under the new rules for every Florida business client making significant equipment investments this year.
✅ Planning note: While 100% bonus depreciation is powerful, taking an oversized deduction in a single year can trigger the Net Operating Loss limitation rules (covered below) that restrict how efficiently you can use losses in future profitable years. Our tax planning team models optimal depreciation timing for every Florida client to ensure deductions are captured at maximum efficiency — not just maximum speed.
R&D Expensing: The Five-Year Capitalization Requirement Is Gone
For the past several years, Florida businesses engaged in domestic research and development were frustrated by a requirement to capitalize and amortize R&D costs over five years. The OBBB repeals this requirement entirely, allowing for full immediate expensing of domestic R&D costs retroactive to January 1, 2025.
For costs previously capitalized between 2022 and 2024, the law provides a flexible catch-up mechanism. Florida businesses should work with our CPA team to determine which election produces the best outcome based on their projected taxable income over 2025 and 2026.
Deduct the Full Remaining Balance in 2025
Take the entire remaining unamortized R&D balance as a full deduction on the 2025 tax return. Best for Florida businesses with significant taxable income in 2025 who can absorb the full deduction efficiently without triggering the NOL trap.
Spread the Deduction 50/50 Over 2025 and 2026
Deduct 50% of the remaining unamortized balance in 2025 and the remaining 50% in 2026. Best for Florida businesses that want to optimize across two tax years to stay within the most efficient marginal tax brackets.
⚠️ Important for Florida businesses with multi-state operations: Some states require R&D costs to continue being amortized even if the federal return now expenses them immediately. Before electing a catch-up method, confirm your state tax treatment with our multi-state tax advisory team to avoid unexpected state add-back adjustments. This is addressed in detail in the State Conformity section below.
New for 2026: Section 168(n) — 100% Deduction for U.S. Manufacturing Buildings
The OBBB introduces an entirely new provision under Section 168(n) — the Qualified Production Property (QPP) deduction. This provision offers a 100% deduction for new, qualified nonresidential real property or buildings used for manufacturing within the United States. This is a dramatic departure from the standard 39-year depreciation schedule that has long applied to commercial real estate, and it creates a powerful incentive for Florida manufacturers considering new facility construction or acquisition in 2026.
Florida manufacturers, processors, assemblers, and other qualifying production businesses should discuss this provision with our financial advisory team before making any facility investment decisions. The interaction between Section 168(n) and state-level conformity rules is an important consideration that our team addresses in the context of your complete multi-state filing strategy.
Pass-Through Permanence: QBI Deduction and Section 163(j) Restored for Good
The OBBB delivers two critical stability provisions for pass-through business owners — S corps, LLCs, and partnerships — that eliminate significant uncertainty that had been hanging over small business tax planning for years.
| Provision | Prior Status | OBBB Change | Florida Business Impact |
|---|---|---|---|
| Section 199A — 20% QBI Deduction | Set to expire after 2025 | Made permanent | Long-term rate certainty for all pass-through entities |
| Section 163(j) — Business Interest Limit | Restricted EBIT standard (no D&A add-back) | EBITDA standard restored | Significantly higher deductibility for capital-intensive firms |
| Section 1202 — QSBS Gain Exclusion | Prior exclusion limits | Gain exclusion expanded | More attractive for Florida C corp founders and early investors |
| 100% Bonus Depreciation | Phasing down (60% in 2024) | Permanently restored to 100% | Full immediate deduction for all eligible property |
| Domestic R&D Expensing | 5-year mandatory amortization | Immediate expensing restored | Retroactive catch-up available for 2022–2024 capitalized costs |
The permanent 20% QBI deduction ensures that Florida S corp, LLC, and partnership owners continue to pay an effective rate that is competitive with the corporate tax rate. For Florida business owners who have been hesitant to invest in their entities due to uncertainty about the deduction’s future, the permanence of Section 199A is a clear signal that the pass-through structure remains highly tax-efficient for qualified businesses. Our AI-powered financial platform models the real-time effective rate impact of the QBI deduction for every Florida pass-through client based on their actual income and deduction profile.
Critical Loss Traps: Why Bigger Deductions Aren’t Always Better
While the OBBB’s expanded deductions are genuinely powerful, Florida business owners need to understand two critical loss limitation rules that can reduce the efficiency of taking maximum deductions in a single year. Taking a large deduction may look attractive at the top line — but the result can be a “paper loss” that cannot be efficiently deployed against future income. Our tax planning team models multi-year deduction timing for every Florida client to optimize total tax savings, not just current-year deductions.
Net Operating Loss (NOL) Limitation
NOL carryforwards can only offset up to 80% of taxable income in any future year. Over-deducting in a single year can create a large paper loss that you cannot fully use to wipe out tax in future profitable years, delaying your actual cash tax benefit.
Excess Business Loss (EBL) Limit — Now Permanent
The OBBB made the Section 461(l) limitation permanent. Non-corporate taxpayers (S corp and partnership owners) cannot use more than $313,000 ($626,000 joint filers) of business losses to offset non-business income. Excess losses are converted to an NOL carryforward, delaying tax relief.
⚠️ The strategic imperative: The most common mistake Florida business owners make under the new depreciation and R&D expensing rules is maximizing deductions in the current year without modeling the NOL and EBL limitations that may prevent those deductions from delivering their intended tax relief. Our financial advisory team coordinates depreciation elections, R&D catch-up choices, and business loss positions across multiple years to ensure you capture deductions at peak efficiency — not just peak speed.
2026 Payroll Compliance: Strict New Reporting for Tips and Overtime
The IRS offered penalty relief in 2025 for qualified tips and overtime, allowing businesses to use reasonable tracking methods like separate year-end statements. 2026 marks the end of that grace period. Strict enforcement begins this year, and Florida businesses that have not updated their payroll systems to meet the new requirements are at risk of penalties. Our bookkeeping and payroll services team manages these updates automatically for every Florida payroll client.
Track and Report Qualified Overtime — FLSA Premium Portion Only
The deduction applies strictly to the FLSA “half-time” premium portion of overtime pay — the extra half over the base regular rate for hours worked beyond 40. The base regular rate component of overtime is not deductible. Your payroll system must isolate and separately report the premium portion for each qualifying employee to meet the 2026 compliance standard.
Track Qualified Tips — Voluntary Gratuities Only
The tip exemption applies only to voluntary gratuities from customers — not mandatory service charges, automatic gratuities, or employer-set tip pools. Florida hospitality, food service, and personal service businesses must ensure their point-of-sale and payroll systems correctly distinguish between voluntary tips and service charges.
Assign Treasury Tipped Occupation Codes (TTOC) for Each Worker
Mandatory Treasury Tipped Occupation Codes must now be assigned and reported for each tipped employee. This is a new administrative requirement that requires updating your payroll system, not just your year-end reporting process. Our payroll team implements TTOC assignment for every affected Florida payroll client.
FICA and FUTA Still Apply — Employers Remain Liable
While employees receive an income tax break on qualifying tips and overtime, employers remain fully liable for FICA and FUTA taxes on the full amount of these wages. The employee-level income tax exemption does not reduce the employer’s payroll tax obligations. This distinction must be clearly reflected in your payroll accounting.
The Multi-State Maze: State Conformity and the Decoupling Problem
One of the most significant — and frequently underestimated — challenges of the 2026 filing season is the lack of uniformity between federal and state tax treatments. While the OBBB offers generous federal deductions and incentives, many states have begun to decouple from these provisions to protect their own tax revenues. Florida businesses with operations, employees, payroll, or property in multiple states must be aware of where state law diverges from federal OBBB provisions.
🌎 What “decoupling” means for your Florida business: Because some states use “static” or “fixed-date” conformity to federal tax law, they do not automatically adopt new federal changes like the OBBB’s tip and overtime exemptions, bonus depreciation restoration, or accelerated R&D expensing. In these jurisdictions, Florida businesses may be required to “add back” federal deductions on their state returns, effectively maintaining two different sets of books — one reflecting OBBB federal treatment and one reflecting the state’s pre-OBBB rules.
Before finalizing any investment or deduction strategy for 2026, Florida businesses with multi-state exposure must identify exactly where each state’s tax law stands relative to the OBBB provisions they are relying on. Failing to account for state-level add-backs can produce unexpected state tax liabilities that significantly offset the federal savings you modeled. Our multi-state tax planning team maintains current state conformity maps for every state in which our Florida clients have filing obligations, ensuring your strategy accounts for both federal and state tax outcomes simultaneously. Learn more about how we approach financial planning strategy on our financial management advisory page.
🤖 AI-Powered Tax Modeling for Florida Businesses
Our AI financial platform models every OBBB provision against your actual income, entity structure, state filing obligations, and multi-year deduction timing in real time — so you see the complete after-tax picture before committing to any election or capital decision. This is tax planning with the precision and speed your 2026 filing season demands. Schedule your free consultation today →
Frequently Asked Questions About OBBB Business Tax Changes for Florida Businesses
Is Your Florida Business Ready for the 2026 Filing Season?
Book a free 30-minute consultation with Kal. We will review your entity structure, model the OBBB provisions most relevant to your business, and build a clear action plan for depreciation elections, R&D catch-up choices, payroll compliance, and state conformity — before you file a single return.
