Bonus Depreciation State Conformity
An overview of how bonus depreciation adjustments are calculated and reported for state tax returns, including the 3 primary treatment categories: additions, subtractions, and no modification.
All states calculate and report depreciation adjustments in different ways. The adjustments can generally be placed into 3 categories:
- Addition- The state disallows Bonus/179 deductions and adds the adjustment back to federal income. (Example: California Form 100).
- Subtraction- The state disallows Bonus/179 deductions and subtracts the allowable depreciation from federal income. (Example: Georgia Form 600).
- No Modification- The state follows federal depreciation rules, so no adjustment is needed. (Example: Colorado).
