What Is the Private Jet Tax Write-off? A Guide for NJ Owners
Owning a private jet is convenient (to say the least). Owners can fly to any destination at pretty much any given time and date to accommodate their schedules. Besides being a convenient mode of luxury transportation, It is also a substantial investment that requires the use of depreciation and tax codes such as IRS Section 179 to mitigate the business expense.
In this article, we discuss several private jet write-off options, including federal bonus depreciation and the impact of the One Big Beautiful Bill Act (OBBBA). We also highlight the State of New Jersey’s position on these matters. The information contained in this blog is provided for general information and educational purposes only. It does not constitute legal, tax, accounting, or other professional advice. Consult your tax advisor or attorney regarding your personal position.
How Bonus Depreciation for Aircraft Changed in 2025
Before we discuss how aircraft depreciation changed in 2025, let’s look at the situation before the One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025.
Aircraft are generally depreciated under the IRS (Internal Revenue Service) Modified Accelerated Cost Recovery System (MACRS) using the declining balance method before switching to the straight-line method. Owners of new and used aircraft that are predominantly used for business purposes can further utilize bonus depreciation. The Tax Cuts and Jobs Act (TCJA) of 2017 introduced a phasedown approach with the following consequences for bonus depreciation of assets.
- 2025: Bonus depreciation drops to 40%
- 2026: Bonus depreciation drops to 20%
- 2027: Bonus depreciation is fully eliminated.
The OBBBA changed that by permanently reinstating the 100% bonus depreciation rate.
What This Means for NJ Buyers Considering an Aircraft Purchase
Since Monmouth Executive Airport is based in Wall Township, New Jersey, we know that NJ, as with many other states, does not conform to the federal 100% bonus depreciation deduction. What does this mean for potential aircraft owners based in NJ? The purpose of a private jet tax write-off is to provide financial benefits. If you receive a large federal deduction, there will be very limited to no immediate state deduction, creating a higher current state tax liability.
Some New Jersey-based aircraft owners choose to elect out of federal bonuses for several reasons, including to:
- Allow for standard MACRS depreciation.
- Avoid state add-back adjustments.
- Multistate tax filers want to reduce state compliance complexities.
What Is 100% Bonus Depreciation for Aircraft?
The OBBA of 2025 reinstates 100% bonus depreciation, as mentioned. What does this mean for aircraft? One hundred percent of the acquisition cost of new and used aircraft procured and placed in service on or after January 20, 2025, may now be deducted.
An article published by the National Business Aviation Association (NBAA) states there may be a limited opportunity for aircraft owners who signed purchase agreements before the effective date to claim the 100% bonus depreciation. The 100% bonus depreciation legislation and accompanying regulations also apply to whole and fractional aircraft purchases.
Section 179 Aircraft Expensing Limits for Business Owners
The IRS Section 179 tax code allows businesses to deduct the full price of qualifying equipment and property from their gross income in the year it is placed in service, rather than depreciating it over several years. This can be done to a federal limit of $2,560,000 (2026).
However, as with the federal bonus depreciation, New Jersey does not conform to the federal Section 179 limit either. Aircraft expense limits in NJ are capped at $25,000 (2026). In New Jersey, any federal Section 179 above the NJ cap must be depreciated over the asset’s useful life. It is imperative to consult with professionals when an owner wants to explore private jet tax write-off options.
How the Business Use Test for Aircraft Applies Under IRS Rules
A private jet tax write-off is only possible when the aircraft’s usage passes the qualified business use (QBU) test annually. Aircraft are deemed listed property under Internal Revenue Code (IRC) §280F. It must be used more than 50% annually for active trade or business purposes before accelerated depreciation (MACRS) and bonus depreciation can be claimed.
The complexities of a private jet write-off are substantial. Monmouth Jet Center at Monmouth Executive Airport offers aircraft charter services for those in business class who don’t want to deal with the ownership complexities of a private jet. We are only an hour’s drive from downtown Manhattan or a 20-minute helicopter ride. Contact Monmouth today for more information on our services or view our website: https://monmouthjetcenter.com/