You've got three emails from CPAs about the "One Big Beautiful Bill," every one of them going on about residential construction contracts — and you're an electrical sub who just wants to know if the truck is deductible.
I get it. I spent years on the service truck — running calls, doing takeoffs, tracking whether a job actually made money — before I ever sat down with a tax return. So when a new tax law lands and the whole internet starts explaining it to homebuilders, I know exactly who it wasn't written for: you.
Here's the deal. The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, is real, and some of it genuinely helps a $2–4M electrical shop. But there's one line everybody's talking about that probably doesn't touch your business — and a couple of quieter ones that put real money back in your pocket. We'll get to both.
Start with the one that matters most right now: equipment. For the 2026 tax year, the Internal Revenue Service (IRS) lets you expense up to $2,560,000 of qualifying equipment under IRC Section 179, and 100% bonus depreciation is now a permanent part of the code — not phasing down the way it was scheduled to. Two clocks are running. Your Q3 estimated payment is due September 15, and anything you want to write off this year has to be bought and placed in service by December 31, 2026. Miss that date and the deduction doesn't disappear — it just slides into next year, when you may need it less.
If you opened those CPA emails, decided none of it applied to you, and closed the laptop — you're not behind, and you're not missing something obvious. Most of the contractors I talk to are in exactly that spot. The generic construction coverage really was written for someone else. The trick is knowing which few provisions were quietly written for you.
Can an electrical contractor write off a whole work truck in 2026?
In most cases, yes. A work truck or van rated over 6,000 pounds GVWR can be expensed in the year you place it in service — through the Section 179 deduction, 100% bonus depreciation, or a combination of the two.
There's a catch worth knowing. The heavy-SUV version of this deduction is capped at $32,000 for 2026. But a true work vehicle — a cargo van, or a pickup with a bed at least six feet long — generally isn't treated as an SUV, so that cap usually doesn't bite. Your tools, test equipment, and off-the-shelf software can qualify too.
Here's a hypothetical example — not a real client, just to show the mechanics. Say a hypothetical electrical S-corp buys an $85,000 service truck and $35,000 in tools and test gear, and places all of it in service in November 2026. Between Section 179 and 100% bonus depreciation, the business could potentially deduct the full $120,000 on its 2026 return, rather than spreading it over several years. The actual result always depends on the business's income and how the elections are made.
So the real question isn't "can I write it off" — it's "did I get it in service before the year closed."
Does the residential contract tax change in OBBBA apply to electrical subcontractors?
Usually, no — and this is the part those emails get wrong for you. The change everyone's excited about expands which residential construction contracts can use the completed-contract method of accounting. That break lands on the party holding the long-term residential contract — typically the general contractor or the developer.
As an electrical sub, your scope is a slice of the job, and your work often turns faster than the whole build. The headline provision filling your inbox mostly isn't yours to claim.
I'd rather tell you that plainly than let you chase a deduction that was never pointed at your business. That's the one thing most owners get wrong here — and it's why generic advice costs you time you don't have.
Is the 20% QBI deduction permanent — and how does my salary affect it?
Yes. OBBBA made the 20% Qualified Business Income (QBI) deduction under IRC Section 199A permanent, after it had been scheduled to sunset. For an S-corp owner, that's often the single biggest line on the return.
Here's the part most people miss. Once your taxable income clears the 2026 threshold — $201,750 single, $403,500 married filing jointly — the QBI deduction on a non-service business like electrical contracting gets limited by the W-2 wages your company pays. In plain terms: the salary you run through payroll isn't just a number to keep the IRS happy. Above that threshold, it's part of what determines your QBI deduction. Set it too low and you can shrink a deduction worth far more than the payroll tax you were trying to trim.
That means your owner salary and your tax deduction are the same conversation — exactly the kind of thing a generic return preparer never raises.
Does "no tax on overtime" help my electricians — and what do I have to do?
It can help your W-2 crew, and it's a genuine recruiting and retention angle — but read the fine print before you promise anyone anything. OBBBA created a temporary deduction (tax years 2025 through 2028) for qualified overtime. Your electricians can deduct the "half" premium portion of their time-and-a-half pay, up to $12,500 a year ($25,000 for joint filers), phasing out above $150,000 of income.
Two things matter for you as the employer. First, it's the employee's deduction, not the company's — it doesn't cut your business's tax bill. Second, 1099 workers don't qualify; this is W-2 only. For 2026, you'll report each worker's qualified overtime on the W-2 in Box 12 using code "TT," so your payroll setup needs to capture it.
So the move here isn't a tax filing — it's making sure your payroll can flag that number, and letting your crew know it exists.
What waiting actually costs you
Let's put the cost of waiting in real terms — no scare tactics, just math. Every truck or piece of gear you place in service on January 2 instead of December 31 pushes a full year's deduction into a return you haven't filed yet. And every year you run above the QBI threshold with an under-set salary, you may be quietly giving back part of a deduction that's now permanent.
None of that is an emergency. But it is money with a timer on it, and the timer resets December 31.
The good news is this is more straightforward than it probably feels from where you're sitting. Three moves get you most of the way. First, list what you've already bought and placed in service in 2026 — trucks, tools, test equipment, software. Second, look at your owner salary next to your distributions; if your taxable income is near or above the QBI threshold, that ratio is worth a real conversation before year-end. Third, check that your payroll can separate and report qualified overtime for your W-2 crew.
If you want to walk through this with someone who knows the trade, schedule a free 15-minute call.
Quick gut-check — if any of these sound like you, it's worth 15 minutes: you've bought a vehicle or major equipment in 2026 and haven't confirmed how it'll be deducted; you set your owner salary once and haven't revisited it against your profit since; or you've got W-2 field crew working real overtime and no plan to report the qualified portion.
The honest hesitations
"I can't drop six figures on equipment just for a deduction." You don't have to. You can finance the truck and still deduct it in the year it's placed in service — writing off the cost doesn't require paying cash for it. And OBBBA's change to the Section 163(j) interest rules makes the interest on that financing easier to deduct, too.
"I've ignored this stuff for years — I don't want a lecture." You won't get one. Everybody I talk to has something they've been meaning to get to. A first conversation is about finding the money, not grading the past.
"Advisors just want to sell me something." Fair. That's why the first call is 15 minutes, free, and about your numbers — not a pitch.
Most CPAs who claim a construction niche backed into it from behind a desk. I came up in the trade — on the truck, on the takeoffs, on the jobs that didn't make money — then learned the tax code. What you get from working with someone who speaks both languages is a plan where your equipment, your salary, and your crew's pay all pull in the same direction, instead of sitting as three separate problems.
You opened this because the generic coverage didn't answer your actual question. You've probably got a clearer picture now of what applies to your shop and what you can ignore. The next step is a short conversation to turn that into a year-end plan before the December 31 clock runs out.
If you're sitting there thinking "I bought a truck this year and have no idea what happens next" — that's exactly who the call is for.
Book a Free 15-Minute Year-End Tax Check-In
Frequently asked questions
What is the Section 179 limit for electrical contractors in 2026?
For 2026, you can expense up to $2,560,000 of qualifying equipment under Section 179, with the deduction phasing out once total purchases pass $4,090,000. Most electrical shops are nowhere near those ceilings, so the practical limit is your equipment spend, not the cap.
Do I have to pay cash for a work truck to deduct it?
No. You can finance a vehicle or equipment and still deduct it in the year it's placed in service. The deduction is tied to placing the asset in service, not to how you paid for it.
Does "no tax on overtime" apply to my 1099 workers?
No. The overtime deduction is limited to W-2 employees receiving qualified overtime under federal labor rules. Genuine 1099 contractors don't qualify, and the deduction belongs to the worker, not your business.
Can electrical contractors use the expanded completed-contract method under OBBBA?
Usually not. That change applies to the party holding the long-term residential construction contract — generally the general contractor or developer — not a specialty electrical subcontractor whose scope is a portion of the project.
This article is for educational purposes only and is not tax, legal, or financial advice. Please consult a qualified professional about your specific situation.