Tax practitioners say U.S. businesses should closely monitor the interpretive guidance that federal agencies continue to issue on theOne Big Beautiful Bill Act(OBBBA) regarding its significant new tax provisions, to help them fully unlock several key benefits.

The Act, signed into law in July, preserves the21% corporate income tax rate, which was otherwise set to expire in 2026, and makes substantial changes to cost recovery rules, allowing businesses in some cases to depreciate capital expenditures over 12 months rather than 39 years. Tax experts at consulting firm Alvarez & Marsal made these remarks during a webinar on February 18.

However, the U.S. Treasury Department and the Internal Revenue Service (IRS) still need to provide taxpayers with more guidance on how to interpret the law, including defining key terms in the Act.

Much of this work will be handled by the IRS Office of Chief Counsel, which must decide which matters take priority and which can be deferred, said Kevin Jacobs, national tax office practice leader at Alvarez & Marsal Tax, during the online event.

"People are still grappling with a lot of open questions," Jacobs said during the event.

One of the IRS'slatest pieces of guidanceon OBBBA was released on February 18, coveringadditional interim instructions for the corporate alternative minimum tax. That announcement followed the January 14 release ofNotice 2026-11, which addressed the 100% bonus depreciation rule in the tax law. More guidance is expected to follow.

Looking ahead, further clarification and guidance on the depreciation of domestic research and development costs under Section 174A of the Internal Revenue Code could come "as early as April and as late as the end of May or early June," said Lucy Siegel, director in the national tax office at Alvarez & Marsal, during the event.

A shift in cost recovery rules

Tax experts noted that the Act includes several key depreciation and amortization changes: making the depreciation rules for two asset classes permanent and allowing taxpayers to deduct 100% of domestic research and development costs in the first year.

The Act "really represents a shift in how we think about cost recovery. For many taxpayers, in the past we did tax planning around accelerated cost recovery provisions, thinking about how to accelerate deductions from a time-value perspective," said Rayth Myers, managing director in the national tax office at Alvarez & Marsal Tax, who participated in the event, in an interview.

Now, depreciation can be completed within one year, which, if elected, will lower taxable income and immediately free up corporate capital. Myers said these changes should prompt businesses to rethink their tax strategies.

"It's a detailed modeling exercise because every taxpayer's facts will be a little bit different," Myers said. "A significant part of what we're doing right now is helping clients work through their fact patterns to unlock the maximum benefit under these provisions."

Qualified production property

Newly addedSection 168(n)of the Internal Revenue Code provides favorable depreciation rules for "qualified production property," a term that generally applies to nonresidential real property used in production, manufacturing, and refining.

The rule will allow businesses to write off some costs within one year, whereas under the old rules those costs would take decades to depreciate. "This is the first time, at least in my career, and I believe in my lifetime, that bonus depreciation is allowed for 39-year property—as long as it falls within the definition of qualified property," Siegel said.

"If you're a company that deals with inventory, you know that production can sometimes be defined broadly, such as simply mixing two chemicals," she said. However, the term qualified production property is "not perfectly defined" in the law, and taxpayers will still need further regulations from the government to fully benefit from the provision, she added.

Additionally, practitioners said businesses must also consider how the different elements of the law work together to optimize the benefits offered by the Act.