{ "dataset": "State conformity to federal bonus depreciation and §179", "scope": "Individual income tax (Schedule E rental). Corporate conformity may differ and is out of scope.", "taxYear": 2026, "lastVerified": "2026-08-06", "source": "https://strdeduct.com/states", "license": "Free to reproduce, in whole or in part, with attribution and a link to https://strdeduct.com/states", "disclaimer": "Educational information, not tax advice. State conformity shifts yearly — check lastVerified against your filing year before relying on any row.", "jurisdictionCount": 46, "jurisdictions": [ { "state": "AL", "name": "Alabama", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Alabama Dep't of Revenue, \"The One, Big, Beautiful Bill Act — Analysis and Tax Provisions,\" Executive Summary (Oct. 31, 2025, updated Nov. 10, 2025), Individual Income Tax Provisions, I.R.C. §168(k) entry, pp. 13–14", "note": "Verbatim: \"I.R.C. § 168(k) - Full Expensing for Certain Business Property … Effective Date: Property Placed into Service on or After January 19, 2025 / Tied to Federal: Yes / Corresponding State Authority: §40-18-15(a)(8), Code of Ala. 1975.\" This entry sits inside the Individual Income Tax Provis" }, { "source": "Same ALDOR Executive Summary, I.R.C. §179 entry (Individual Income Tax Provisions, p. 15); Ala. Code §40-18-15(a)(21)", "note": "Verbatim: \"increases the maximum amount a taxpayer may expense under Code section 179 to $2.5 million … phaseout threshold from $2.5 million to $4 million … Tied to Federal: Yes / Corresponding State Authority: §40-18-15(a)(21), Code of Ala. 1975.\" No Alabama-specific dollar cap, so section179Cap " }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "AK", "name": "Alaska", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Alaska Dep't of Revenue, Tax Division (tax.alaska.gov) — tax program listing", "note": "Read directly; the Division's program list contains no individual or personal income tax program (oil & gas production/property, marijuana, and other excise programs only). This is negative evidence — the page does not affirmatively state \"no personal income tax,\" which is why this row is flagged." }, { "source": "Alaska Stat. §43.20.011, \"Tax on corporations\" (2025 Alaska Statutes)", "note": "Section heading and the 1980 repeal of the individual-tax subsections were confirmed only through search-result indexing of the codified statute; akleg.gov and law.justia.com both refused automated retrieval (HTTP 403), so the statutory text itself was NOT read. Substantively the point is not in dou" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "AZ", "name": "Arizona", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "A.R.S. §43-1022(17)(e) (azleg.gov, current text)", "note": "Verbatim: \"In taxable years beginning from and after December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been the full amount allowed pursuant to" }, { "source": "A.R.S. §43-1021(11) (azleg.gov, current text)", "note": "The paired addition: \"The amount of any depreciation allowance allowed pursuant to section 167(a) of the internal revenue code to the extent not previously added.\" §43-1022(18) then releases any remaining unrecovered amount on disposition." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "AR", "name": "Arkansas", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 1250000, "note": "Arkansas allows NO bonus depreciation — full year-one add-back. It adopts IRC §§167 and 168(a)–(j) as in effect January 1, 2019 and expressly omits §168(k), so this is not a deferral schedule with a scheduled recovery: the disallowed amount simply stays in Arkansas basis and recovers over the ordinary MACRS life (27.5-yr residential shell, 5/7/15-yr cost-seg components) on a separate Arkansas depreciation schedule. §179 is frozen at the January 1, 2022 version — $1,250,000 cap / $3,130,000 phaseout for TY2025, indexed off the pre-OBBBA $1M base — so Arkansas does not get OBBBA's $2.5M. The TY2026 Arkansas §179 figure will be the further-indexed pre-OBBBA amount (above $1.25M) and has not been confirmed in a published DFA source.", "citations": [ { "source": "Ark. Code Ann. §26-51-428, as stated in Arkansas DFA, 2025 Sub-Chapter S Corporation Income Tax Instructions, Line 20 – Depreciation", "note": "Verbatim: \"ACA 26-51-428 does not adopt the bonus depreciation provisions contained in Internal Revenue Code 168(k). For Arkansas income tax purposes, Internal Revenue Code Sections 167 and 168 (a) – (j) as in effect on January 1, 2019 is adopted for tax years beginning on or after January 1, 2019." }, { "source": "Arkansas DFA, Corporation Income Tax — Corporate FAQs (dfa.arkansas.gov)", "note": "\"No bonus depreciation is allowed for Arkansas income tax purposes.\"" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "CA", "name": "California", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 25000, "note": "no §168(k) conformity at all; no OBBBA conformity as of mid-2026 — the big add-back state", "citations": [ { "source": "docs/05a-tax-deep-dive.md §R", "note": "California does not conform to §168(k) bonus; §179 capped at $25,000" }, { "source": "Cal. Rev. & Tax. Code §§17255, 24356", "note": "state §179 limited to $25,000" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "CO", "name": "Colorado", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Colorado Dep't of Revenue, Individual Income Tax Filing Guide (Book 104), TY2025 — DR 0104 line 1 and the complete Additions instructions, lines 2 through 9", "note": "Read the full additions list line by line: line 2 state income tax, line 3 §199A QBI, line 4 standard/itemized deduction, line 5 business meals, lines 6–7 non-qualifying 529/ABLE distributions, line 8 reserved, line 9 other additions (bond interest, conservation easement, alien labor, partnership/fi" }, { "source": "RSM US, \"Colorado acts to counter the OBBBA\" (Aug. 2025 special session: HB 25B-1001 through HB 25B-1005)", "note": "Secondary, used to rule out a recent decoupling: Colorado's five OBBBA-response bills addressed the §199A QBI add-back, FDDEI/foreign income, insurance premium tax, credit sales, and the sales tax vendor fee — none touched §168(k) or §179. Searches for a 2026-session depreciation decoupling returned" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "DE", "name": "Delaware", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 0.8, "section179Cap": null, "note": "Delaware is normally rolling-conformity, but H.B. 255 decoupled the PERSONAL income tax from OBBBA's 100% bonus for property placed in service after 12/31/2025, substituting the TCJA phase-down: TY2026 allows only 20% bonus, so 80% of the federal §168(k) deduction is disallowed in year one; TY2027 and later allow 0% (a full add-back). The disallowed amount is recovered through ordinary MACRS on the higher Delaware basis, not a fixed multi-year spread. The carve-out sunsets for property placed in service after 12/31/2030, when Delaware returns to federal rules. §179 was untouched — Delaware follows the federal dollar cap. Note the individual date differs from the corporate one (corporations decoupled from property placed in service after 1/19/2025).", "citations": [ { "source": "Delaware Division of Revenue, Technical Information Memorandum 2025-2 (Dec. 23, 2025), \"Delaware HB 255: Decoupling from Certain Provisions of the Federal 'One Big Beautiful Bill' Act (OBBBA)\"", "note": "Read verbatim. \"For individuals, this applies to property placed in service after December 31, 2025... generally, the tax year 2025 bonus depreciation is permitted at 40%; tax year 2026 bonus depreciation is permitted at 20%; and tax year 2027 and later bonus depreciation is 0%.\" Sunset: property " }, { "source": "Del. H.B. 255, 153rd Gen. Assem. (signed Nov. 19, 2025), amending Title 30 of the Delaware Code", "note": "Enacting legislation behind TIM 2025-2. The specific 30 Del. C. section amended for the personal income tax modification (Chapter 11 modifications) was not read directly in this pass; the substantive rule is taken from the Division of Revenue's own TIM. No Delaware add-back form line was verified." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "DC", "name": "District of Columbia", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 25000, "note": "DC flatly disallows the §168(k) allowance — and, post-OBBBA, the §168(n) qualified-production-property allowance — and caps §179 at the lesser of $25,000 or actual cost. An individual adds the federal bonus plus the excess §179 back on D-40 Schedule I, Calculation A, Line 3, and recovers it as the excess of DC over federal depreciation on Calculation B, Line 5, over the asset's remaining life on the un-reduced DC basis. On disposition, DC gain/loss is recomputed excluding any bonus depreciation, so the add-back is not silently clawed back at sale.", "citations": [ { "source": "D.C. Code §47-1803.03(a)(7)(B)(i)–(iii)", "note": "Read verbatim. (i) \"No deduction shall be allowed for the special depreciation allowance under § 168(k) of the Internal Revenue Code of 1986\"; (ii) §179 allowed only in \"an amount of equal to the lesser of $25,000 or the actual cost of the property for the year the property is placed in service\"" }, { "source": "D.C. Code §47-1803.03(a)(18)(A)", "note": "Read verbatim; repeats the $25,000 §179 cap. Subsection (c) of the same section addresses individuals' standard/itemized deductions, confirming §47-1803.03 is not franchise-tax-only." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "FL", "name": "Florida", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Fla. Const. art. VII, §5(a)", "note": "\"No tax upon estates or inheritances or upon the income of natural persons who are residents or citizens of the state shall be levied by the state, or under its authority, in excess of the aggregate of amounts which may be allowed to be credited upon or deducted from any similar tax levied by the U" }, { "source": "Florida Department of Revenue — general taxpayer guidance", "note": "FL DOR states Florida does not impose a personal income tax. Located via search snippet rather than a direct page fetch; the constitutional provision above is the controlling authority. The Florida corporate add-back mentioned in the note was NOT verified against Fla. Stat. ch. 220 in this pass — no" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "GA", "name": "Georgia", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Georgia has never adopted §168(k) at any percentage (nor §168(n)), so 100% of the federal bonus is added back. The mechanic is a gross swap rather than a named bonus line: the taxpayer adds back ALL federal depreciation on the other-addition line of Form 500 Schedule 1 and subtracts Georgia-basis depreciation computed on a Georgia Form 4562 on the other-subtraction line, recovering the difference over the asset's ordinary MACRS life. Georgia is static-conformity — H.B. 1199 moved the date to the IRC as of 1/1/2026 for tax years beginning on or after 1/1/2025 — and it conforms to the increased federal §179(b) dollar cap but not to §179 for qualified real property. Georgia also applies the §461(l) excess business loss limit to income recomputed after the §168(k) disallowance, and gain/loss on sale differs from federal because the Georgia basis is higher.", "citations": [ { "source": "Ga. Dep't of Revenue, \"Income Tax Federal Tax Changes\" — Other Georgia Coupling and Decoupling Provisions", "note": "Read verbatim from the DOR page source. \"Georgia has also not adopted the following: 30%, 50%, and 100% bonus depreciation rules, I.R.C. Section 168(k).\" The same page lists §168(n) as not adopted, describes \"the 168(k) disallowance\" in the §461(l) ordering discussion, and gives the add-federal-" }, { "source": "O.C.G.A. §48-1-2(14), as amended by Ga. H.B. 1199 (signed Mar. 20, 2026)", "note": "Conformity updated to the IRC as enacted on or before Jan. 1, 2026, for tax years beginning on or after Jan. 1, 2025. That H.B. 1199 continues the §168(k) and §168(n) decoupling while adopting the increased §179(b) maximum is from firm alerts (BDO, Warren Averett, Aprio), not read from the bill text" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "HI", "name": "Hawaii", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 25000, "note": "does not operate §168(k); does not adopt the federal §179 increases", "citations": [ { "source": "Haw. Rev. Stat. §235-2.4", "note": "Hawaii income tax law does not operate §168(k) bonus depreciation; §179 held at $25,000" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "ID", "name": "Idaho", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Idaho is fully decoupled from §168(k) and stayed decoupled after OBBBA: H.B. 559 (signed Feb. 10, 2026) advanced the IRC conformity date to Jan. 1, 2026 but expressly preserved the bonus-depreciation exception, so 100% of the federal bonus is added back in year one; Idaho then recomputes depreciation on the un-reduced basis and the taxpayer takes annual subtractions over the asset's remaining recovery period (and on disposition, via a different Idaho basis), but the subtractions are forfeited entirely if the year-one addition was never made. §179 is not among the Idaho decoupling adjustments in §63-3022O, so Idaho follows the federal §179 dollar cap — this is the weaker leg of the row, inferred from statutory absence plus Tax Commission guidance rather than a line-item read of the full §63-3022 modification list.", "citations": [ { "source": "Idaho Code § 63-3022O (Adjustment — Property Acquired After September 10, 2001)", "note": "\"the adjusted basis of depreciable property, depreciation, and gains and losses from sale, exchange, or other disposition of depreciable property acquired after December 31, 2009, shall be computed without regard to subsection (k) of section 168\" — read via FindLaw's reproduction of the Idaho Code" }, { "source": "Idaho Admin. Code r. 35.01.01.125 (IDAPA 35.01.01.125), Adjustments to Taxable Income — Bonus Depreciation", "note": "Confirms the mechanics: year-one addition of the full federal bonus, then \"in the subsequent taxable years the taxpayer is entitled to the Idaho subtractions for the additional depreciation computed for Idaho income tax purposes that exceeds the amount of depreciation claimed for federal income tax" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "IL", "name": "Illinois", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Illinois has rolling IRC conformity but a standing §203 addition modification that reverses bonus depreciation, so the entire federal §168(k) bonus is added back in year one on Form IL-4562 Step 2 and flows to Schedule M; the deferral is not lost — Step 3 gives an annual subtraction for the regular depreciation Illinois allows on the un-reduced basis over the asset's life, with any unrecovered balance released on disposition. Note the moving parts for 2025–2026: federal bonus is 100% for property acquired and placed in service after Jan. 19, 2025 (a 40%/60% election exists for the first taxable year ending after that date, which would scale the Illinois add-back correspondingly), and P.A. 104-0453 separately decoupled Illinois from §168(n) qualified-production-property bonus for tax years beginning on or after Jan. 1, 2026. Illinois has no §179 cap of its own — IL-4562 instructions direct that §179 amounts are not reported on the form.", "citations": [ { "source": "Illinois DOR, Form IL-4562 (Special Depreciation) Instructions, current year — tax.illinois.gov", "note": "Purpose is \"to reverse the effects of the 30, 40, 50, 60, 80, or 100 percent bonus depreciation allowed by Internal Revenue Code (IRC) Section 168(k) and (n).\" Step 2 computes the addition; Step 3 the later-year subtractions. Instructs that only the special depreciation allowance — not §179 — is r" }, { "source": "Illinois DOR Informational Bulletin FY 2026-15, 'What's New for Illinois Income Taxes' (December 2025), p. 3", "note": "\"For property acquired and placed in service after January 19, 2025, the federal bonus depreciation is 100% of the basis of the property... taxpayers may elect to apply a federal bonus depreciation of 40% or 60%.\" And: \"For tax years beginning on or after January 1, 2026, Public Act 104-0453 amen" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "IN", "name": "Indiana", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 25000, "note": "Indiana is the harshest of the five for a cost-seg STR: the full federal §168(k) bonus is added back on IT-40 Schedule 1, line 4, AND §179 is separately capped at $25,000 with the excess added back on line 5 — so both acceleration routes are closed in year one. Recovery is automatic rather than a named subtraction: the add-back is computed each year as the difference between federal AGI as filed and federal AGI recomputed without bonus/excess §179, so once federal depreciation on the written-down basis falls below Indiana's, the line turns negative and works as a subtraction over the remaining recovery period. Indiana updated its conformity date to Jan. 1, 2026 and SEA 243 (2026) extended the same decoupling to §168(n) qualified production property, so the treatment is unchanged for 2026.", "citations": [ { "source": "Indiana DOR, 'Indiana Add-Backs' (in.gov/dor/i-am-a/individual/indiana-add-backs/)", "note": "\"You must make an exception for any bonus depreciation deduction used for property placed in service after Sept. 11, 2001\" — recompute net income without the bonus method and add back the difference. And: \"Indiana allows you to figure IRC Section 179 expense using a ceiling of no more than $25,00" }, { "source": "Form IT-40 Schedule 1 (Add-Backs), lines 4 and 5", "note": "Line 4 is the bonus depreciation add-back; line 5 is the §179 expense excess add-back. The named line on the additions schedule is the strong evidence of decoupling." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "IA", "name": "Iowa", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "2025 IA 4562A Instructions, Iowa Department of Revenue, form 41-105d (rev. 06/02/2025), page 1", "note": "\"Important Note: For tax years beginning on or after January 1, 2021, Iowa fully conforms with bonus depreciation under IRC § 168(k). No adjustments are required on this form for property placed in service during a tax year that begins on or after January 1, 2021 if bonus depreciation was taken on " }, { "source": "2021 Iowa S.F. 619, repealing former Iowa Code § 422.35(19A)", "note": "The legislative mechanism that removed the bonus-depreciation add-back, effective for tax years beginning on or after Jan. 1, 2021. Identified via secondary reporting; the operative effect is confirmed by the DOR instruction above." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "KS", "name": "Kansas", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "K.S.A. 79-32,117(b) (Kansas adjusted gross income of an individual; addition modifications) — ksrevisor.gov", "note": "Read in full: the enumerated additions cover state/local bond interest, deducted income taxes, federal NOL, federal refunds, handicapped-accessibility depreciation claimed for a credit, employee pickups, credit-claimed charitable contributions and certain business expenses. No addition for §168(k) b" }, { "source": "K.S.A. 79-32,109(a)(1) (definition of 'federal internal revenue code') — ksrevisor.gov", "note": "Rolling conformity: the code \"and amendments thereto... as the same may be or become effective at any time, or from time to time, for the taxable year.\" Kansas therefore inherits OBBBA's §168(k) treatment automatically." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "KY", "name": "Kentucky", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 100000, "note": "Full bonus add-back. Schedule M (740) Part I line 3 adds back ALL federal Form 4562 depreciation and Part II line 12 subtracts depreciation recomputed on a 'created' Kentucky Form 4562, on which the taxpayer is told to strike out and ignore the special depreciation allowance line — so the bonus is recovered as ordinary MACRS over the asset's life, never as a year-one deduction. Kentucky is STATICALLY conformed for depreciation to the IRC in effect 12/31/2003 (12/31/2001 for property placed in service 9/11/2001-12/31/2019), so OBBBA's permanent 100% bonus never reaches a Kentucky return. Section 179 is capped at $100,000 for property placed in service on or after 1/1/2020, and the federal investment phase-out threshold does not apply for Kentucky purposes.", "citations": [ { "source": "Kentucky Schedule M (Form 740), tax year 2025, 42A740-M (10-25), Instructions for Line 12 — Depreciation, Section 179 Deduction and Gains/Losses From Disposition of Assets", "note": "Read directly. States: 'In Part II, strikethrough and ignore line 14, Special depreciation allowance for qualified property placed in service during the tax year.' Also directs use of 'the IRC in effect on December 31, 2003 for property placed into service on or after January 1, 2020.'" }, { "source": "Kentucky Schedule M (Form 740), tax year 2025, Line 12 instructions, 'Create a Kentucky Form 4562' paragraph", "note": "Read directly. 'For property placed into service on or after January 1, 2020: in Part I, line 1 enter the Kentucky limit of $100,000 and the phaseout threshold does not apply for purposes of determining Kentucky depreciation.' (Prior period: $25,000 limit / $200,000 phase-out.)" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "LA", "name": "Louisiana", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Louisiana Form IT-540 (2025) Resident Individual Income Tax instructions, 'What's New for Louisiana 2025 Individual Income Tax' — Schedule E, Adjustments to Income, Line 2E", "note": "Read directly. 'Add back of federal depreciation previously accelerated via state bonus — Line 2E — La. R.S. 47:297.25... For each taxable year following the year you claim this deduction, you are required to add back to your Federal AGI the amount of federal depreciation claimed on the same propert" }, { "source": "Louisiana Form IT-540 (2025) instructions, Schedule E, Bonus Depreciation — Code 32E", "note": "Read directly. 'La. R.S. 47:297.25 allows businesses to elect a bonus depreciation deduction, also known as full expensing, for qualified property placed in service during the tax year... deduct 100% of the cost of qualified property on your Louisiana return.' Defines 'qualified property' by IRC §§1" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MD", "name": "Maryland", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 25000, "note": "Full bonus add-back. Maryland Form 500DM lists the federal Special Depreciation Allowance as a 'Decoupled Provision' and disallows it entirely; the taxpayer prepares a pro forma federal return without the decoupled provisions, and the year-one difference is an addition, with the disallowed basis recovered in later years as subtraction modifications (Form 500DM is reused each year and flips negative once state depreciation exceeds federal). This applies to individuals, not just corporations — the Part A code table carries rows for Form 502 (resident) and 505 (nonresident), coded to 'Other Additions'/'Other Subtractions'. Section 179 is capped at $25,000, reduced dollar-for-dollar above $200,000 of §179 property, for tax years beginning on or after 1/1/2003. Maryland has also decoupled from OBBB's §168(n) qualified production property allowance (Form 500DM line 7) and §174A R&E full expensing (line 5).", "citations": [ { "source": "Maryland Form 500DM (2025), COM/RAD-24 10/25, 'Decoupled Provisions' bullet list", "note": "Read directly. Decoupled provisions include 'Special Depreciation Allowance under the federal Job Creation and Worker Assistance Act of 2002 (JCWAA) as increased and extended under the federal Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA); and subsequent federal legislation, includi" }, { "source": "Maryland Form 500DM (2025), 'Decoupled Provisions,' Section 179 bullet", "note": "Read directly. 'For Maryland tax purposes, a taxpayer only is allowed to expense up to $25,000, reduced dollar-for-dollar by the amount over $200,000, of the cost of Section 179 property that is purchased and put in service for a trade or business for the tax year' — for tax years beginning on or af" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MA", "name": "Massachusetts", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "decouples from §168(k) — depreciate as if bonus were never elected; follows federal §179", "citations": [ { "source": "Mass. G.L. c. 62 §2(d)(1)(N); TIR 02-11", "note": "bonus depreciation disallowed for Massachusetts purposes" }, { "source": "docs/05a-tax-deep-dive.md §R", "note": "MA listed among the decoupling / partial-conformity states" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MI", "name": "Michigan", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 0.8, "section179Cap": 1250000, "note": "Effectively a PARTIAL decoupler as of 2026, and this changed very recently — Michigan was a conforming state before. HB 4961 (Public Act 24 of 2025) froze the individual income tax to the IRC in effect 12/31/2024 for tax years beginning after 12/31/2024, so only the PRE-OBBBA bonus rate is allowed: 40% for 2025, 20% for 2026, 0% for 2027. Federal gives 100%, so for a 2026 placed-in-service cost segregation the year-one add-back is 80% of the federal bonus, reported on MI-1040 Schedule 1, and the disallowed amount is then recovered annually as the depreciation that would have been allowed under pre-OBBBA law. That becomes a full 100% add-back in 2027. Michigan also decoupled from §168(n) and §174A. Section 179 is held at pre-OBBBA limits rather than OBBBA's $2.5M; the $1,250,000 figure given is the pre-OBBBA 2025 statutory limit — the 2026 pre-OBBBA-indexed amount (roughly $1.28M) was NOT verified. Both michigan.gov (HTTP 403) and legislature.mi.gov (connection refused) blocked automated retrieval, so no primary source was actually read; verify against the Treasury notice and the 2025 MI-1040 Schedule 1 instructions before relying on this row.", "citations": [ { "source": "Michigan Department of Treasury, Taxpayer Notice, 'Decoupling Michigan Income Taxes from Certain Internal Revenue Code Provisions' (Feb. 25, 2026)", "note": "LOCATED BUT NOT READ — michigan.gov returned HTTP 403 to WebFetch on three separate URL paths. Per search-engine extraction, the notice states that for individual and FTE taxpayers Michigan continues to conform to §168(k) but must use the IRC in effect 12/31/2024, and gives this example: a 2025 fede" }, { "source": "Michigan HB 4961 of 2025, enacted as Public Act 24 of 2025 (amending MCL 206.12, 206.30, 206.36, 206.607, 206.695, 206.805)", "note": "NOT READ — legislature.mi.gov and legiscan.com both refused/blocked retrieval. Per search summary and Senate Fiscal Agency analysis abstract: decouples Michigan from OBBBA (P.L. 119-21) changes to IRC §§174A, 168(k), 168(n), 179 and 163(j), requiring pre-P.L. 119-21 policies, effective for tax years" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MN", "name": "Minnesota", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 0.8, "section179Cap": null, "note": "Decoupled: 80% of the federal §168(k) deduction is added back in year one on Schedule M1MB (Business Income Additions and Subtractions), and the taxpayer subtracts 20% of that addition in each of the next five tax years — so the deduction is deferred, not lost. Minnesota is a STATIC-conformity state; H.F. 2438 (Session Laws 2026, ch. 128) moved the IRC conformity date to May 1, 2026 and adopted OBBBA's permanent 100% bonus and the $2.5M §179 limit (both beginning TY2025), but deliberately kept the 80% addition. §179 therefore follows federal with no separate Minnesota cap (Minnesota's old six-year §179 subtraction schedule was repealed for property placed in service in 2020 and later). One carve-out that does not help a short-term rental: the addition does not apply to qualified production property. Note also that if loss limitation rules (passive activity, EBL, NOL) prevent the bonus from being deducted federally, the Minnesota addback is suspended and carried forward.", "citations": [ { "source": "Minnesota Department of Revenue, \"Bonus Depreciation\" (revenue.state.mn.us/bonus-depreciation)", "note": "DOR guidance page: individuals \"add back 80% of allowable bonus depreciation when calculating Minnesota taxable income\" and \"subtract 20% of the required addition from taxable income in each of the five taxable years following the year the addition is required.\"" }, { "source": "Minnesota Department of Revenue, Analysis of Session Laws 2026, Chapter 128 (H.F. 2438), Omnibus Tax Bill (revenue.state.mn.us/sites/default/files/2026-05/hf2438sf2082-enacted-otb.pdf)", "note": "Primary DOR bill analysis: \"The bill updates references to the Internal Revenue Code to May 1, 2026, adopting the provisions of P.L. 119-21\"; \"Minnesota requires 80% of the federal bonus depreciation deduction to be added back in the first year, with a subtraction of that amount allowed in equal " }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MS", "name": "Mississippi", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Miss. Code Ann. §27-7-17, as amended by H.B. 1733 (2023 Reg. Sess.)", "note": "Statute: \"'Qualified property' means and has the same definition as such term has in 26 USCS Section 168(k) as it existed on January 1, 2021, and shall apply to property placed in service after December 31, 2022\"; and \"Mississippi's treatment of the deduction shall conform to the provisions of 26" }, { "source": "Mississippi Department of Revenue, Income Tax Notice 80-23-003, \"Depreciation\" (Oct. 20, 2023)", "note": "DOR notice implementing H.B. 1733: \"For tax years beginning after December 31, 2022, expenditures for business assets that are qualified property or qualified improvement property shall be eligible for one hundred percent (100%) bonus depreciation and may be deducted as an expense incurred by the t" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MO", "name": "Missouri", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "RSMo §143.121 (Missouri adjusted gross income of a resident individual)", "note": "\"The Missouri adjusted gross income of a resident individual shall be the taxpayer's federal adjusted gross income subject to the modifications in this section.\" The §168 addition modification is expressly confined to property \"purchased on or after July 1, 2002, but before July 1, 2003\"; no gen" }, { "source": "RSMo §143.091 (Meaning of terms)", "note": "Rolling conformity language: references to federal law mean the IRC of 1986 \"and amendments thereto, and other provisions of the laws of the United States relating to federal income taxes, as the same may be or become effective, at any time or from time to time, for the taxable year.\"" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "MT", "name": "Montana", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "MCA §15-30-2120, Adjustments to federal taxable income to determine Montana taxable income", "note": "Complete enumeration of individual additions and subtractions contains no §168(k) bonus depreciation or §179 adjustment; the sole depreciation-related addition is subsection (2)(c), \"depreciation or amortization taken on a title plant as defined in 33-25-105.\"" }, { "source": "MCA §15-30-2101(14) (definitions)", "note": "Rolling conformity: \"'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended, or as it may be labeled or further amended. References to specific provisions of the Internal Revenue Code mean those provisions as they may be otherwise labeled or further amended.\"" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "NE", "name": "Nebraska", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Nebraska Department of Revenue, \"Bonus Depreciation and Enhanced Section 179 Expense Deduction for Nebraska Income Tax Purposes\" (guidance document, binding on DOR until amended)", "note": "\"For tax years beginning on and after January 1, 2006, taxpayers are not required to add-back any bonus depreciation or enhanced section 179 expense deduction taken on their federal return.\"" }, { "source": "Neb. Rev. Stat. §77-2716 (Income tax; adjustments)", "note": "The 85% bonus depreciation increase to federal AGI applied only \"for taxable years beginning or deemed to begin before January 1, 2006 ... for assets placed in service after September 10, 2001, and before December 31, 2005.\" No current-year §168(k) or §179 modification." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "NV", "name": "Nevada", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Nev. Const. art. X, § 1(9)", "note": "Verbatim: \"No income tax shall ever be levied upon the wages or personal income of natural persons.\" Repeal would require a voter-approved constitutional amendment, so this is stable, not a year-to-year policy setting." }, { "source": "Nev. Rev. Stat. ch. 363C (Commerce Tax)", "note": "Context only: the sole broad Nevada business tax is a gross-receipts tax with a $4M threshold and no cost-recovery deduction, so no bonus/§179 interaction arises." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "NJ", "name": "New Jersey", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 25000, "note": "Full decoupling — New Jersey Gross Income Tax allows NO federal §168(k) bonus depreciation, so OBBBA's permanent 100% bonus buys an STR owner nothing on the NJ-1040. §179 is capped at $25,000, with no business-income limitation and no carryforward of unused amounts. The disallowed bonus is deferred, not lost: NJ basis (federal basis less the NJ §179 amount) is depreciated using the same method and life used federally, recovering the difference over the asset's life, with a year-of-disposition true-up to NJ gain or loss. For a Schedule E rental the adjustment is computed on Worksheet GIT-DEP and carried to NJ-1040, NJ-BUS-1 Part IV (rents, royalties, patents and copyrights); the disposition piece goes to NJ-1040 Schedule B. Static conformity: NJ fixes §179 to the IRC in effect Dec. 31, 2002, so federal cap increases never flow through. One legacy quirk: the old 30% allowance is still technically allowed where it applies, but that only ever covered property acquired Sept. 2001–May 2003, so a 2026 STR asset gets a 100% add-back.", "citations": [ { "source": "N.J.S.A. 54A:5-1.2, added by P.L. 2004, c.65, §§ 24 and 26", "note": "Decouples the Gross Income Tax (not just the Corporation Business Tax) from federal bonus depreciation and §179; effective for tax years beginning on or after Jan. 1, 2004." }, { "source": "NJ Division of Taxation, Worksheet GIT-DEP, Gross Income Tax Depreciation Adjustment Worksheet, General Instructions (rev. 12/18; current form)", "note": "Read directly. \"The federal 50% Special Depreciation Allowance is not allowed.\" \"The maximum Section 179 deduction is $25,000... There are no business income limitations. Unused deductions cannot be carried forward.\" Part II Col. K: \"The 50% special depreciation allowance is not permitted.\" Pa" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "NM", "name": "New Mexico", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "NM Taxation & Revenue Dept., Instructions for 2025 PIT-ADJ, Schedule of Additions, Deductions, and Exemptions", "note": "Read directly. Lines 1-5 are the complete list of additions to federal AGI; there is no §168(k), §179, or depreciation addition of any kind. \"IMPORTANT: Do not add any amounts to Schedule PIT-ADJ that are not listed on this schedule. If an item is not listed, it is not a valid New Mexico addition, " }, { "source": "NM Taxation & Revenue Dept., Personal Income Tax Information Overview (tax.newmexico.gov)", "note": "\"Personal income tax in New Mexico starts with the Federally Adjusted Gross Income (FAGI)\" — so federal bonus depreciation taken on Schedule E is embedded in the NM starting point absent an add-back." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "NY", "name": "New York", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Full decoupling — the entire federal §168(k) special depreciation deduction is added back on Form IT-225 using addition code A-209. In its place New York allows a depreciation deduction determined under IRC §167 as that section would have applied if the property had been acquired on September 10, 2001 — in practice plain MACRS with no bonus — claimed as subtraction S-213 each year until the property is fully depreciated or disposed of, so the benefit is deferred rather than lost, with a year-of-disposition true-up via S-214. The computation runs on Form IT-398. Beginning with TY2025 the same add-back extends to the new OBBBA §168(n) qualified production property. The only exceptions are resurgence zone property and New York liberty zone property under IRC §1400L(b)(2), neither of which will apply to a typical STR. §179 follows federal with no dollar cap; the single carve-out is a full add-back (code A-208) of any §179 claimed on a sport utility vehicle over 6,000 lbs by a taxpayer who is not an eligible farmer — worth catching if the owner expensed a heavy vehicle against the rental.", "citations": [ { "source": "N.Y. Tax Law §§ 612(b)(8) and 612(c)(16)", "note": "The addition and subtraction modifications for IRC §168(k) property, cited on Form IT-398; §612(b)(8) also drives the passive-activity interaction noted on the form." }, { "source": "NY Dept. of Taxation & Finance, Form IT-398 (2025), New York State Depreciation Schedule for IRC Section 168(k) Property, General Instructions", "note": "Read directly. \"For tax years beginning after December 31, 2002, NYS does not allow the federal special depreciation deduction for Internal Revenue Code IRC § 168(k) property [except for resurgence zone property and New York liberty zone property described in IRC § 1400L(b)(2)], placed in service i" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "NC", "name": "North Carolina", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 0.85, "section179Cap": null, "note": "adds back 85% of federal bonus, recovered 20% per year over the next five state years", "citations": [ { "source": "N.C. Gen. Stat. §105-153.6(a)", "note": "85% of the §168(k) deduction added back; deducted in five equal parts over the following five years" }, { "source": "docs/05a-tax-deep-dive.md §R", "note": "NC listed among the decoupling / partial-conformity states" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "ND", "name": "North Dakota", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "N.D. Office of State Tax Commissioner, 2025 Individual Income Tax Instructions (Form ND-1 / ND-EZ), \"Changes Affecting You and Your Income Tax — Federal Taxable Income — One Big Beautiful Bill Act (OBBBA)\"", "note": "Read directly: \"The starting point for computing North Dakota taxable income perpetually conforms to the computation of federal taxable income. As a result, the federal changes to income and deductions that impact the computation of federal taxable income are by default included in the starting poi" }, { "source": "N.D. Schedule ND-1SA (Statutory Adjustments), SFN 28710", "note": "Read the full line list. Additions are limited to line 1 (lump sum distribution from federal Form 4972) and line 2 (loss from S corporation taxed as a C corporation). No §168(k) or §179 add-back exists." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "OK", "name": "Oklahoma", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Okla. Tax Comm'n, 2025 Oklahoma Resident Individual Income Tax Forms and Instructions (Form 511 Packet), Schedule 511-A line 15 — \"Oklahoma Bonus Depreciation Deductions\"", "note": "Read verbatim: \"A deduction for bonus depreciation on qualified property or qualified improvement property covered under IRC Sec. 168 is allowed. The qualified property is eligible for 100% Oklahoma bonus depreciation and may be deducted as an expense incurred by the taxpayer during the taxable yea" }, { "source": "Same packet, Schedule 511-B (Oklahoma Additions) line 8 — \"Oklahoma Bonus Depreciation Add-back\"", "note": "Read verbatim: the add-back applies \"If a taxpayer elects immediate and full expensing of qualified property or qualified improvement property\" so that state expensing \"shall in no event be a duplication of any depreciation or bonus depreciation allowed or permitted on the federal income tax retu" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "OR", "name": "Oregon", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "CHANGED FOR 2026 — Oregon newly decoupled. SB 1507, signed April 9, 2026, advanced Oregon's IRC connection date from Dec. 31, 2023 to Dec. 31, 2025 but simultaneously disallowed §168(k). Section 7 adds to federal taxable income the difference between the §168(k) deduction allowable for the tax year and the deduction allowable under §168(k) as amended and in effect on Dec. 1, 2017; because that pre-TCJA version grants no bonus for property placed in service after 2019, the practical add-back for 2026 property is the entire federal bonus. It applies to property placed in service in tax years beginning on or after Jan. 1, 2026, and is recovered by a corresponding subtraction over the asset's remaining depreciable life (normal MACRS). §179 was not decoupled and still follows the federal cap. Oregon also did not decouple from §168(n) qualified production property — irrelevant to residential STR. A cost-segregation study on an Oregon STR placed in service in 2026 now produces a large federal/Oregon timing gap where 2025 had none.", "citations": [ { "source": "Oregon Dep't of Revenue, 2026 Summary of Legislation — SB 1507", "note": "Read directly. States SB 1507 \"disconnects Oregon tax laws from some of the federal tax code changes\" and \"disallows bonus depreciation for tax years 2026 and later,\" with other federal connections updated to Dec. 31, 2025 / Jan. 1, 2026. The bill is listed under both the Business Division and t" }, { "source": "Or. Laws 2026, SB 1507 § 7 (enrolled)", "note": "Add-back language, obtained via search of the enrolled text (OLIS was unreachable from this network, so the bill text itself was NOT read end-to-end): \"there shall be added to federal taxable income for Oregon tax purposes the difference between the amount allowable as a deduction under Section 168" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "PA", "name": "Pennsylvania", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "No bonus at all, ever — and not as an add-back. PA personal income tax is a standalone scheme that does not start from federal AGI, so §168(k) simply never enters the calculation: \"Bonus depreciation is not allowed for Pennsylvania personal income tax purposes\" and \"The federal elections for bonus depreciation do not apply.\" Depreciation runs under 72 P.S. § 7303(a.2) — straight-line or a department-prescribed method, or the federal method only if the property carries the same adjusted basis federally, which bonus destroys. Effect equals a 100% year-one add-back recovered over the normal life, plus a permanent PA/federal basis difference to carry to disposition. §179 now tracks the federal dollar limit for property placed in service in tax years beginning on or after Jan. 1, 2023 (Act 53 of 2022), so no state cap — but it requires business use, is limited to active PA business income, and has no carryforward, so a rental on PA Schedule E generally cannot use it. Watch the classification: PA moves rentals with significant services (common for STRs) off Schedule E into net profits on PA Schedule C.", "citations": [ { "source": "Pa. Dep't of Revenue, PA Personal Income Tax Guide — Net Income (Loss) from the Operation of a Business, Profession or Farm", "note": "Read directly: \"Bonus depreciation is not allowed for Pennsylvania personal income tax purposes,\" and \"The federal elections for bonus depreciation do not apply for Pennsylvania personal income tax purposes.\"" }, { "source": "Pa. Dep't of Revenue, PA Personal Income Tax Guide — Net Income (Loss) from Rents, Royalties, Copyrights and Patents, \"Depreciation and IRC Section 179 Property Deductions\"", "note": "The rental (PA Schedule E) chapter — extracted and read. It flags \"significant differences between federal and Pennsylvania personal income tax depreciation rules\" and routes the reader to the business chapter above for the operative rules. Also contains the \"Significant Services\" test that recl" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "RI", "name": "Rhode Island", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Full decouple: RIGL 44-61-1 disallows bonus depreciation from the 2002 Act \"or any subsequent federal enactment\" (so OBBBA's permanent 100% bonus is caught too) across title 44 chapters 11, 14 and 30 — chapter 30 is the personal income tax. Entire year-one bonus is added back on RI Schedule M line 2d; recovery is real, not lost — RI depreciates the asset on the pre-2002 schedule and the unrecovered amount comes back as a line 1i subtraction over the asset's normal life, with disposition gain computed on the higher RI basis. Section 179 tracks the federal dollar amounts for assets placed in service on/after 1/1/2014 (RIGL 44-61-1.1), but RI separately decoupled from OBBBA's increased 179(b) limits for TY2025 in its FY2026 budget; that decoupling regulation is written for TY2025 and prior, and TY2026 has not been legislated — so a large 179 claim in 2026 is the soft spot here, not bonus.", "citations": [ { "source": "R.I. Gen. Laws § 44-61-1 (Depreciation of assets)", "note": "Bonus depreciation under P.L. 107-147, the 2003 Act, \"or any subsequent federal enactment\" shall not be allowed for RI purposes; depreciation is allowed as it would have been computed prior to the Job Creation and Worker Assistance Act of 2002, and gain on subsequent disposition uses a basis consi" }, { "source": "RI Division of Taxation, 2025 RI Schedule M (Modifications to Federal AGI), RI-1040 — line 2d and line 1i", "note": "Named modification lines on the individual return: line 2d is the addition for federal bonus depreciation under RIGL 44-61-1; line 1i is the subtraction for bonus depreciation taken federally that has not yet been subtracted from RI income. A standing add-back line, which is the strongest form of ev" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "SD", "name": "South Dakota", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "South Dakota Department of Revenue, \"Taxes\" page for individuals (dor.sd.gov/individuals/taxes)", "note": "\"South Dakota is one of seven states that does not impose a state income tax.\" The taxes listed for individuals are use, sales, property, motor fuel, cigarette/tobacco, and alcohol — no income tax of any kind." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "TN", "name": "Tennessee", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Tennessee Department of Revenue, Hall Income Tax page (tn.gov/revenue/taxes/hall-income-tax)", "note": "\"The Hall Income tax was repealed for tax periods that begin on January 1, 2021, or later. Please do not file a return for any tax year that begins on or after January 1, 2021.\"" }, { "source": "TN DOR guidance HIT-3, \"Hall Income Tax Repealed Beginning January 1, 2021\" (revenue.support.tn.gov)", "note": "Confirms full repeal effective for tax years beginning 1/1/2021. The Hall tax base was interest and dividend income only, so no Tennessee individual return has ever carried a Schedule E rental depreciation schedule." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "TX", "name": "Texas", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Tex. Const. art. VIII, § 24-a (\"Individual Income Tax Prohibited\"), added by Proposition 4, approved November 2019", "note": "\"The legislature may not impose a tax on the net incomes of individuals, including an individual's share of partnership and unincorporated association income.\" Prop 4 replaced the 1993 Bullock Amendment's voter-approval trigger with an outright ban; repeal now requires a new constitutional amendme" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "UT", "name": "Utah", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Utah State Tax Commission, TC-40A Supplemental Schedule instructions, incometax.utah.gov/tc-40a/", "note": "Read directly. Complete Part 1 'Additions to Income' code list contains no bonus depreciation, federal depreciation, or IRC §168(k) addition." }, { "source": "Utah Code Ann. §59-10-103 (Individual Income Tax Act — Definitions)", "note": "Defines IRC references as the Code 'in effect for the taxable year' — rolling conformity, so OBBBA's permanent 100% §168(k) bonus is picked up automatically absent decoupling legislation. Statutory text read via FindLaw's reproduction; le.utah.gov PDF also located." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "VT", "name": "Vermont", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Hard statutory decoupling, not a conformity-date lag: 32 V.S.A. §5811(21) defines Vermont taxable income as federal taxable income 'determined without regard to 26 U.S.C. §168(k)', so OBBBA cannot change it. 100% of the federal bonus is added back on Schedule IN-112 in year one, then recovered in later years as a subtraction equal to the excess of regular MACRS depreciation over the federal deduction — a timing difference, not a permanent loss. Act 164 of 2026 updated Vermont's conformity for TY2025 and additionally decoupled from §168(n) qualified production property, but left the §168(k) disallowance untouched. §179 is not decoupled and follows federal.", "citations": [ { "source": "32 V.S.A. §5811(21)", "note": "'Taxable income' means federal taxable income 'determined without regard to 26 U.S.C. §168(k)'. Permanent structural exclusion — survives any federal amendment. Statutory text read via FindLaw's reproduction of the section." }, { "source": "Vermont Dept. of Taxes, 'Taxable Income' (personal income tax) and Technical Bulletin TB-44", "note": "Vermont does not recognize federal bonus depreciation; add-back is the difference between standard MACRS and bonus depreciation, entered on Schedule IN-112, with prior-year bonus recovered as a later-year subtraction. tax.vermont.gov returns HTTP 403 to automated fetch; content obtained via search e" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "VA", "name": "Virginia", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": 1250000, "note": "Full bonus add-back — Virginia has disallowed §168(k) since 2001 and Tax Bulletin 26-1 confirms it continues; depreciation is recomputed as if no bonus were claimed, with the difference taken as a fixed-date-conformity addition on Schedule ADJ in year one and recovered as a subtraction over the asset's remaining life. Two changes new for 2026 that matter here: Virginia replaced ROLLING conformity with a STATIC fixed date of December 31, 2025, and it now also deconforms from OBBBA's §179 increase and from §168(n) qualified production property. The $1,250,000 §179 cap shown is the pre-H.R.1 limit that Virginia's deconformity falls back to; the Department has not published its own indexed dollar figure for 2026, so confirm the exact number before relying on it.", "citations": [ { "source": "Virginia Tax Bulletin 26-1 (Va. Dept. of Taxation, Feb. 20, 2026)", "note": "Read in full. Under 'Existing Exceptions to Conformity for Taxable Year 2025 and Thereafter': 'Virginia will continue to deconform from ... Bonus depreciation allowed for certain assets under federal income taxation.' Under 'Virginia's Deconformity from 2025 H.R. 1': deconforms from immediate expens" }, { "source": "2026 Amendments to the 2025 Appropriation Act (House Bill 29, Ch. 7, 2026 Acts of Assembly)", "note": "Per TB 26-1, this is the vehicle that replaced Virginia's rolling IRC conformity with a fixed date of December 31, 2025 and enacted the §179 / §168(n) deconformity. Effective as of enactment, February 20, 2026." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "WA", "name": "Washington", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Washington Dept. of Revenue, 'Income tax' page, dor.wa.gov/taxes-rates/income-tax", "note": "Read directly. Confirms Washington imposes no general personal income tax and that the legislature 'recently enacted an income tax on individuals with an annual adjusted gross income of $1,000,000 or more.' The DOR page does not state the effective date." }, { "source": "Wash. Engrossed Substitute S.B. 6346 (signed Mar. 30, 2026)", "note": "9.9% rate on Washington taxable income above a $1M standard deduction, effective January 1, 2028, first payments 2029; base begins with federal AGI. Session law not read directly — effective date corroborated by four independent national firm alerts (PwC, Grant Thornton, EY Tax News, RSM), which agr" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "WV", "name": "West Virginia", "hasPersonalIncomeTax": true, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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).", "citations": [ { "source": "W. Va. Code §11-21-9 (Personal Income Tax — Meaning of terms), as amended by Committee Substitute for S.B. 400, 2026 Reg. Sess.", "note": "Bill text read directly from wvlegislature.gov: 'All amendments made to the laws of the United States after December 31, 2024, but prior to January 1, 2026, shall be given effect ... but no amendment to the laws of the United States made on or after January 1, 2026, may be given any effect.' Amendme" }, { "source": "WV Schedule M (Form IT-140), 'Modifications Increasing Federal Adjusted Gross Income', lines 51–58", "note": "Form read directly (tax.wv.gov). Lines cover federal-obligation interest, non-WV state/local bond interest, interest on borrowing to purchase exempt bonds, 402(e) lump sum, other income deducted federally, and Prepaid Tuition / ABLE / Jumpstart withdrawals. No bonus depreciation add-back exists." }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "WI", "name": "Wisconsin", "hasPersonalIncomeTax": true, "conformsToBonus": false, "bonusAddBackFraction": 1, "section179Cap": null, "note": "Wisconsin allows NO §168(k) bonus depreciation for individual income tax — 100% add-back in year one. Two separate conformity locks: general IRC conformity is static at December 31, 2022, and depreciation specifically is computed under the IRC in effect on January 1, 2014 (Wis. Stat. §71.98(3)), so neither TCJA's phased bonus nor OBBBA's permanent 100% bonus (P.L. 119-21 §70301) reaches Wisconsin — the 2025 Schedule I instructions list the OBBBA provision by name and then say it does not apply. Recovery is not a fixed multi-year add-back schedule: the taxpayer adds back total federal depreciation on Schedule I line 1b and subtracts depreciation recomputed on the (higher) Wisconsin basis on line 2b, every year until the asset is fully depreciated or disposed of, with any residual basis difference trued up as a gain/loss adjustment on sale. §179 is the exception and the practical workaround — Wis. Stat. §71.98(4) adopts IRC §§179–179E as in effect for the taxable year, and DOR confirms Wisconsin follows the same federal maximum dollar and business-income limitations, so a cost-seg STR owner can often shift 5/7/15-year personal property into §179 (subject to the active-trade-or-business requirement) even though bonus is fully disallowed.", "citations": [ { "source": "Wis. Dept. of Revenue, 2025 Wisconsin Schedule I Instructions (Form I-128, R. 12-25), \"Other Differences Between Federal and Wisconsin Law,\" item 1 (Depreciation-related Provisions)", "note": "Item 1(a)(i) recites the federal rule that \"For property placed in service after January 19, 2025, 100% of all qualified property may be expensed under sec. 168(k), IRC. (Section 70301 of Public Law 119-21).\" Item 1(b) then states: \"Wisconsin – These provisions do not apply for Wisconsin. Depreci" }, { "source": "Wis. Dept. of Revenue, 2025 Schedule I Instructions, \"Lines 1b and 2b - Depreciation\" and \"Who Must File\"", "note": "Recovery mechanics: \"you must first add back your federal depreciation by entering the federal amount on line 1b of Schedule I. You may then subtract the revised depreciation allowed for Wisconsin on line 2b.\" And: \"An additional adjustment on Schedule I is required each year until the asset is f" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] }, { "state": "WY", "name": "Wyoming", "hasPersonalIncomeTax": false, "conformsToBonus": true, "bonusAddBackFraction": 0, "section179Cap": null, "note": "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.", "citations": [ { "source": "Wyoming Business Council (Wyoming state agency), \"Business Resources\" — wyomingbusiness.org/why-wyoming/business-resources/", "note": "State agency page lists Wyoming's tax profile explicitly as \"NO corporate state income tax\" and \"NO personal state income tax.\"" }, { "source": "Wyoming Department of Revenue, revenue.wyo.gov", "note": "The department's operating divisions are Excise Tax, Mineral Tax and Property Tax (plus Liquor and Administrative Services). There is no individual income tax division, no individual income tax return, and no additions/subtractions schedule — the state administers no personal income tax, so no §168(" }, { "source": "docs/05-tax-reference.md §6", "note": "state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact" } ] } ], "unverified": [ "CT", "ME", "NH", "OH", "SC" ] }