Bonus depreciation by state

Every state, and what it does with your bonus deduction

46 jurisdictions verified against statute or Department of Revenue guidance. The 23that require an adjustment have a page of their own with the arithmetic worked through; where the answer is “nothing changes”, the row below is the whole answer.

• Alabamafollows federal

  Alabama's individual income tax ties its depreciation deduction to federal law, and ALDOR's own OBBBA analysis flags IRC §168(k) 100% expensing as "Tied to Federal: Yes" in the INDIVIDUAL income tax section — no year-one add-back and no separate Alabama depreciation schedule for a Schedule E filer. Alabama's individual base is "piecemeal" conformity, so the conclusion rests on the specific §40-18-15(a)(8) tie rather than on general rolling conformity.

• Alaskano income tax

  Alaska levies no broad personal income tax — the individual/fiduciary provisions of the Alaska Net Income Tax Act were repealed in 1980 and AS 43.20.011 is now titled "Tax on corporations." Bonus depreciation conformity is therefore moot for an individual STR owner: there is no Alaska return on which a cost-seg deduction is added back or allowed. conformsToBonus=true / addback=0 is a modeling convention here, not a conformity finding.

• Arizonafollows federal

  Net effect is FULL bonus, but by a two-line mechanic, not silence: A.R.S. §43-1021(11) adds back all federal §167(a) depreciation, and §43-1022(17)(e) subtracts depreciation recomputed "as if the additional allowance for depreciation had been the full amount allowed pursuant to section 168(k)" for property placed in service in tax years beginning after 12/31/2016 — so the paired addition/subtraction on Form 140 nets to zero and a 2026 cost-seg study is fully deductible in Arizona. Two caveats: Arizona is STATIC-conformity (IRC as of Jan. 1, 2026 per H.B. 4168, which does reach OBBBA), and it decouples from the new §168(n) qualified production property allowance for TY2026+ (irrelevant to residential STR). Pre-2017 property carries a different Arizona basis.

• Arkansas100% add-back
• California100% add-back
• Coloradofollows federal

  Rolling IRC conformity starting from federal taxable income (DR 0104 line 1), and the additions schedule contains no depreciation line — so OBBBA 100% bonus and the $2.5M §179 limit flow straight through with no Colorado adjustment. Colorado's enumerated additions are state income tax, the §199A QBI add-back (AGI over $500K/$1M, made permanent by HB 25B-1001), the itemized/standard deduction add-back above $300K AGI, business meals, non-qualifying 529/ABLE distributions, and "other additions" (municipal bond interest, conservation easement, alien labor, fiduciary/K-1). Note for a high-income STR owner: the QBI add-back, not depreciation, is the Colorado item that bites.

• Delaware80% add-back
• District of Columbia100% add-back
• Floridano income tax

  No broad personal income tax — Fla. Const. art. VII, §5(a) bars the state from taxing the income of natural persons beyond any federally creditable amount, and no such federal credit exists, so the effective limit is zero. Bonus depreciation conformity is therefore moot for an individual Schedule E STR owner, and the true/0 values here mean "no state-level adjustment," not "Florida affirmatively conforms." Caveat for entity structuring only: Florida's CORPORATE income tax does require a bonus depreciation add-back spread over later years, so this row would not describe an STR held in a C corporation.

• Georgia100% add-back
• Hawaii100% add-back
• Idaho100% add-back
• Illinois100% add-back
• Indiana100% add-back
• Iowafollows federal

  Iowa flipped from decoupled to fully conforming: for tax years beginning on or after Jan. 1, 2021 no §168(k) adjustment is required at all, so an STR cost-seg study's full federal bonus flows straight through to the IA 1040 with no add-back and no deferral schedule to track. Iowa's conformity is rolling, so OBBBA's permanent 100% bonus is picked up automatically. The IA 4562A still exists but only for legacy assets — property placed in service in a tax year beginning before Jan. 1, 2021 that already carries an Iowa basis difference, which will keep generating subtractions until those assets are fully recovered or disposed of. §179 likewise matches federal: the instructions' §179 add-back triggers stop at tax years beginning before Jan. 1, 2020 (the last being federal §179 in excess of $100,000 for TY2019), so there is no Iowa cap for 2026.

• Kansasfollows federal

  Kansas conforms — its individual income tax starts from federal AGI and applies only the addition modifications enumerated in K.S.A. 79-32,117(b), which include no bonus-depreciation and no §179 item, and the 2025 Schedule S Part A carries no depreciation add-back line. Conformity is rolling (the IRC "as the same may be or become effective at any time, or from time to time, for the taxable year"), so OBBBA's permanent 100% bonus is picked up without further legislation. Two notes for an STR owner: this is a negative finding — the absence of a modification in a federal-AGI-conformity state — rather than an affirmative DOR statement that Kansas conforms, and Kansas additionally offers an elective expensing deduction under K.S.A. 79-32,143a for individuals, but it is computed net of §168(k) and §179 already claimed and excludes residential rental property, so it will typically add nothing once full federal bonus is taken.

• Kentucky100% add-back
• Louisianafollows federal

  Conforms. Louisiana's individual income tax starts from federal adjusted gross income and makes no §168(k) modification, so federal bonus depreciation on a Schedule E rental flows through untouched. Do not be misled by the depreciation add-back that does appear on Schedule E (line 2E): it reverses Louisiana's OWN optional 100% full-expensing election under R.S. 47:297.25 in each year AFTER the election is claimed — a taxpayer who simply takes federal bonus and makes no state election has nothing to add back. The state election is in fact more generous than federal in places (it reaches qualified improvement property), and 'qualified property' for it is defined by IRC §168(k) as in effect January 1, 2024. No §179 modification exists on the return.

• Maryland100% add-back
• Massachusetts100% add-back
• Michigan80% add-back
• Minnesota80% add-back
• Mississippifollows federal

  No add-back. For tax years beginning after 12/31/2022, Miss. Code Ann. §27-7-17 (as amended by H.B. 1733, 2023) grants a state-law 100% bonus deduction for qualified property and qualified improvement property in the year placed in service. Mechanically this is a Mississippi-specific allowance, not rolling conformity: "qualified property" is frozen to §168(k) as it existed on January 1, 2021, so Mississippi allowed 100% even during the federal 40%/60% phase-down years, and in 2026 it simply matches the federal 100%. §179 explicitly "shall conform to the provisions of 26 USCS Section 179 in effect for that year" — no state cap. Two practical caveats: the deduction is an election that must be made by the extended due date and is irrevocable, and the DOR notice names the election checkbox only on Form 83-122 (corporations) and Form 84-122 (pass-through entities), so an individual reporting Schedule E property directly should confirm the filing mechanics.

• Missourifollows federal

  No add-back and no §179 cap. Missouri adjusted gross income starts from federal AGI, so the federal §168(k) deduction taken on Schedule E flows straight through. Missouri's only bonus depreciation addition modification in RSMo §143.121 is a dead-letter provision limited to property "purchased on or after July 1, 2002, but before July 1, 2003" — it has no application to 2026 acquisitions. Missouri uses rolling conformity, so OBBBA's permanent 100% bonus is picked up automatically without further legislative action.

• Montanafollows federal

  Full conformity, stated affirmatively by the DOR rather than merely by silence: the Form 2 instructions say "Depreciation, depletion, and amortization deductions must be the same for federal and Montana income tax purposes." Montana individual income tax starts from federal taxable income and MCA §15-30-2120 enumerates the additions and subtractions — the only depreciation item on that list is title plant amortization (a title-insurance provision, irrelevant to a rental). Montana defines the IRC on a rolling basis, so OBBBA's 100% bonus and $2.5M §179 limit apply without state legislation. No Montana §179 cap.

• Nebraskafollows federal

  No add-back. Nebraska's 85% bonus depreciation add-back under Neb. Rev. Stat. §77-2716 was confined to assets placed in service after 9/10/2001 and before 12/31/2005; DOR guidance states flatly that for tax years beginning on and after January 1, 2006 no add-back of bonus depreciation or enhanced §179 is required. Nebraska starts from federal AGI with rolling pickup, so the OBBBA 100% bonus flows through. One extra provision worth knowing but which adds nothing here: LB 1023 (2024) §§10–11, operative for tax years beginning on or after January 1, 2026, lets individuals subtract 60% of the cost of qualified property or qualified improvement property — but expressly "limited to the amount not deducted on the federal return," so with a full federal 100% bonus deduction there is no residual Nebraska benefit. It matters only if the federal deduction is reduced or forgone.

• Nevadano income tax

  No broad personal income tax — it is constitutionally prohibited, not merely absent — so §168(k) conformity is moot for an individual STR owner: there is no Nevada individual return on which a Schedule E depreciation adjustment could be reported, and no add-back schedule exists. Nevada's Commerce Tax reaches only businesses with over $4M of Nevada gross revenue and is a gross-receipts tax that allows no depreciation deduction at all, so bonus depreciation is irrelevant there too.

• New Jersey100% add-back
• New Mexicofollows federal

  Conforms for the 2026 personal income tax year. NM personal income tax starts from federal adjusted gross income on Form PIT-1, and the PIT-ADJ additions schedule contains only five additions — tax-exempt bond interest, federal NOL carryover, refunded/rolled-out 529 contributions, the land-conservation charitable deduction, and pass-through-entity withholding. None is a depreciation add-back, and the instructions state that an item not listed is not a valid New Mexico addition. So OBBBA 100% bonus and the full federal §179 flow straight through to Schedule E with no state adjustment. FORWARD FLAG: SB 151, signed Mar. 11, 2026, decouples New Mexico from §168(k) and §168(n) — but it amends § 7-2A-2 NMSA 1978 in the Corporate Income and Franchise Tax Act only, and applies to tax years beginning on or after Jan. 1, 2027. It therefore does not touch an individual's 2026 return on either count. Because the TY2026 PIT-ADJ is not yet published, re-confirm the additions schedule before the 2026 filing season and re-check the individual side again before TY2027.

• New York100% add-back
• North Carolina85% add-back
• North Dakotafollows federal

  Full rolling conformity — North Dakota's own 2025 instructions say the starting point "perpetually conforms to the computation of federal taxable income," so OBBBA's permanent 100% §168(k) bonus flows straight onto Form ND-1 with no adjustment. Schedule ND-1SA carries only two additions (Form 4972 lump-sum distributions; loss from an S corp taxed as a C corp) — there is no depreciation or §179 add-back line anywhere on the individual return. §179 follows federal.

• Oklahomafollows federal

  Conforms, and then some. Oklahoma starts from federal AGI and its additions schedule (511-B) contains no general §168(k) or §179 add-back, so federal bonus flows through untouched. Separately, 68 O.S. § 2358.6A gives an Oklahoma-only election to immediately and fully expense qualified property and QIP at 100% regardless of what federal law does — claimed on Schedule 511-A line 15. The single "Oklahoma Bonus Depreciation Add-back" on Schedule 511-B line 8 is purely an anti-duplication rule that fires only when the taxpayer makes that state election; it is not a decoupling add-back and does not apply to an owner who simply takes federal bonus.

• Oregon100% add-back
• Pennsylvania100% add-back
• Rhode Island100% add-back
• South Dakotano income tax

  No broad personal income tax, so federal bonus conformity is moot for an individual STR owner — there is no South Dakota individual return and no state depreciation schedule to reconcile. The flags are set to conforming purely so the engine computes a zero state adjustment, not because South Dakota affirmatively adopts § 168(k). South Dakota's only income-style tax is the bank franchise tax on financial institutions, which an individual Schedule E filer will not touch.

• Tennesseeno income tax

  No broad personal income tax, so bonus conformity is moot for an individual STR owner. The former Hall income tax reached only interest and dividends — it never applied to wages or rental income — and it was repealed outright for tax periods beginning on or after January 1, 2021, with the DOR instructing taxpayers not to file. Conforming flags here mean "zero state adjustment," not affirmative § 168(k) adoption. One caveat outside this individual analysis: an STR held in an LLC or other entity can fall within the Tennessee franchise and excise tax, which is an entity-level regime with its own depreciation rules and would need to be evaluated separately.

• Texasno income tax

  No personal income tax — it is constitutionally prohibited, not merely absent — so bonus conformity is moot for an individual STR owner and there is no state return or depreciation schedule. Conforming flags mean "zero state adjustment," not affirmative § 168(k) adoption. Reversal would require a constitutional amendment, so this row is unusually durable. Caveat outside this individual analysis: an STR held in an entity can fall within the Texas franchise (margin) tax, a separate entity-level regime with its own cost-of-goods-sold and compensation mechanics rather than federal depreciation; many small owners fall below its no-tax-due revenue threshold, but that must be checked separately.

• Utahfollows federal

  Rolling conformity with no §168(k) decoupling — the federal 100% bonus flows straight through to the TC-40 with no year-one add-back. Verified negatively at the form level: the TC-40A Part 1 addition codes are 51, 53, 54, 56, 57, 60, 61, 67, 68 and 69, and none is a depreciation or §168(k) line. §179 follows federal, including OBBBA's $2.5M limit. Caution: at least one AI-generated content-farm page (LegalClarity) asserts a Utah bonus add-back on the TC-40A; that is false and contradicted by the Tax Commission's own instructions.

• Vermont100% add-back
• Virginia100% add-back
• Washingtonno income tax

  No broad personal income tax for tax year 2026, so §168(k) conformity is moot for an individual STR owner filing on Schedule E. Two forward-looking caveats worth surfacing to a Washington user: (1) a 7% / 9.9% excise tax already applies to long-term capital gains above the standard deduction — relevant on SALE of a property, not to depreciation deductions; and (2) ESSB 6346, signed March 30, 2026, creates a 9.9% individual income tax effective January 1, 2028 on Washington taxable income above a $1,000,000 standard deduction, first payments due 2029. That tax starts from FEDERAL AGI, so bonus depreciation on Schedule E will flow through to it from 2028 — this row should be revisited before TY2028.

• West Virginiafollows federal

  Conforms — but via STATIC conformity re-enacted every legislative session, not rolling, which is the detail that matters. W. Va. Code §11-21-9 as amended by CS for S.B. 400 (2026 Reg. Sess.) gives effect to federal amendments made after December 31, 2024 but prior to January 1, 2026, and none on or after January 1, 2026. OBBBA was enacted July 4, 2025, so it lands inside that window and West Virginia picks up permanent 100% §168(k) bonus and the $2.5M §179 limit. Confirmed negatively at the form level: Schedule M (Form IT-140) 'Modifications Increasing Federal Adjusted Gross Income' lines 51–58 contain no depreciation or §168(k) add-back. Watch the annual update — a session that fails to advance the date would strand post-2025 federal changes, though 100% bonus is already baked into the conformed IRC. Note that the §11-24 citations commonly returned by search are the CORPORATION net income tax article, not the personal income tax article (§11-21).

• Wisconsin100% add-back
• Wyomingno income tax

  Wyoming imposes no broad personal income tax (and no corporate income tax), so there is no state return on which an individual STR owner reports Schedule E rental income and no state depreciation regime at all. Federal §168(k) bonus conformity is therefore moot: modeled as full conformity with a zero add-back purely so the engine does not create a phantom state adjustment. There is no state §179 cap because there is no state income tax to cap it under. The only Wyoming-side tax considerations for an STR are property tax, the state/local sales and lodging taxes on guest bookings, and no state-level treatment of depreciation whatsoever.

Known to decouple, not yet published

These states are on our watchlist as decoupling or partial-conformity jurisdictions, but we have not finished verifying their current rule against Department of Revenue guidance — so there is no page for them yet. An unverified page would be worse than none: CT, ME, NH, OH, SC.

If your state is here, treat the estimator’s state figure as a gap rather than as conformity, and check with your Department of Revenue before relying on it.