Bonus depreciation in Rhode Island
No — Rhode Island does not follow the federal bonus depreciation rules. 100% of the federal bonus deduction is added back to your Rhode Island taxable income in year one, so your state bill does not fall the way your federal bill does.
The rule
- Follows federal §168(k) bonus
- No
- Federal bonus added back in year one
- 100%
- State §179 cap
- Follows federal
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.
What that costs, worked
Take a cost-segregation study that produces $250,000 of federal bonus depreciation and $50,000 of §179 in the first year — a realistic result on a single short-term rental.
- Federal bonus depreciation
- $250,000
- Added back on the Rhode Island return
- $250,000
- Rhode Island taxable income is higher by
- $250,000
A year-one figure. The state-side recovery of the added-back amount in later years is a separate schedule and is not modelled here.
Where this sits in the year
State conformity is the last thing that happens to a deduction, not the first. Before it matters, the property has to clear the seven-day average-stay test and the material participation tests, and the loss has to survive basis, at-risk, and the §461(l) cap — $256,000 single and $512,000 married filing jointly for 2026. The path is laid out in does my short-term rental qualify.
Common questions
- Does Rhode Island allow bonus depreciation?
- No — Rhode Island does not follow the federal bonus depreciation rules. 100% of the federal bonus deduction is added back to your Rhode Island taxable income in year one, so your state bill does not fall the way your federal bill does.
- Does this change my federal deduction?
- No. State conformity affects only your state return. The federal bonus deduction is unchanged — which is why a cost-segregation study can still be worth doing in a state that decouples, just for a smaller total benefit.
- Is the added-back amount lost?
- Not usually. States that require an add-back generally let you recover the amount through ordinary depreciation on the state's own schedule in later years. 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.
Sources
- R.I. Gen. Laws § 44-61-1 (Depreciation of assets) — 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
- RI Division of Taxation, 2025 RI Schedule M (Modifications to Federal AGI), RI-1040 — line 2d and line 1i — 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
- docs/05-tax-reference.md §6 — state conformity shifts yearly — a maintained feed re-checked against current DOR guidance, not a fixed fact
- docs/05a-tax-deep-dive.md §R — year-one add-back signal only; the state-side recovery schedule (state depreciation on the added-back basis) is deferred to the depreciation engine
State conformity shifts from year to year. These figures are maintained against current Department of Revenue guidance, and the citation above is what they were checked against — verify before relying on them for a filing. Model your own year.