Cost Segregation by State
Cost segregation and bonus depreciation, state by state
100% federal bonus depreciation is permanent for qualifying property acquired after January 19, 2025. Whether your state return gets the same treatment depends on where the property’s owner files. The table below covers every state; each link goes deeper.
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State bonus depreciation conformity table
How each state treats federal bonus depreciation (IRC Section 168(k)) on the state return. Rules change; confirm current treatment with your tax professional before filing.
| State | Bonus depreciation | State treatment |
|---|---|---|
| Alabama | Conforms | Alabama conforms to federal depreciation, including 100% bonus depreciation, so the full federal deduction flows through to the Alabama return. |
| Alaska | No income tax | Alaska has no personal income tax, so there is no state-level bonus depreciation question for individually held rentals. Alaska's corporate income tax follows the current federal code and allows 100% bonus for C corporations. The full 100% federal deduction is unaffected and lands in year one. |
| Arizona | Decoupled | Arizona decouples from federal bonus depreciation: the bonus amount is added back and Arizona depreciation is computed without it, recovered over the asset's regular life. For tax years beginning on or after January 1, 2026, Arizona also decouples from the federal qualified production property deduction. The full 100% federal deduction is unaffected and lands in year one; only the Arizona portion is recovered over time. |
| Arkansas | Decoupled | Arkansas has never adopted federal bonus depreciation. The bonus amount is added back on the Arkansas return and the property is depreciated under regular state schedules over its full life, so the state benefit arrives over time instead of in year one. The full 100% federal deduction is unaffected and lands in year one; only the Arkansas portion is recovered over time. |
| California | Decoupled | California does not conform to bonus depreciation at all: the bonus amount is added back and property is depreciated under regular schedules on the California return, with Section 179 capped at $25,000. The federal deduction still applies in full; state savings arrive over the asset's life. |
| Colorado | Conforms | Colorado follows the current federal code automatically, so the permanent 100% bonus depreciation applies in full on the Colorado return. Its 2025 special session decoupled from other federal changes but left bonus depreciation untouched. A 2026 bill (HB26-1222) proposes a state addback beginning with tax year 2027, so confirm the current position for returns after 2026. |
| Connecticut | Decoupled | Connecticut requires a 100% addback of federal bonus depreciation, then lets you deduct the added-back amount at 25% per year over the following four years, so the state benefit is spread rather than lost. The full 100% federal deduction is unaffected and lands in year one; only the Connecticut portion is recovered over time. |
| Delaware | Partial | Delaware decouples from the permanent federal 100% bonus depreciation for property acquired and placed in service from January 1, 2026 through December 31, 2030, applying the older phase-down rates instead: 20% bonus on 2026 Delaware returns and none for 2027 through 2030, with regular depreciation making up the difference over the asset's life. The full 100% federal deduction is unaffected and lands in year one; only the Delaware portion is recovered over time. |
| District of Columbia | Decoupled | DC disallows bonus depreciation entirely and caps Section 179 at $25,000: the bonus amount is added back and the property is depreciated over its regular life on the DC return. DC reaffirmed this decoupling in late 2025. The full 100% federal deduction is unaffected and lands in year one; only the District of Columbia portion is recovered over time. |
| Florida | No income tax | Florida has no personal income tax, so there is no state-level bonus depreciation question for individually held rentals: the federal benefit is the whole story. C corporations subject to Florida's corporate tax add bonus back and deduct it over 7 years. |
| Georgia | Decoupled | Georgia's annual federal conformity updates have always carved out bonus depreciation: the bonus amount is added back and Georgia depreciation is recomputed without it over the asset's normal life, so the state benefit arrives over time. The full 100% federal deduction is unaffected and lands in year one; only the Georgia portion is recovered over time. |
| Hawaii | Decoupled | Bonus depreciation is expressly inoperative for Hawaii income tax: the bonus amount is added back and assets are depreciated under regular schedules on the Hawaii return. The full 100% federal deduction is unaffected and lands in year one; only the Hawaii portion is recovered over time. |
| Idaho | Decoupled | Idaho decouples from bonus depreciation: taxpayers add it back and compute Idaho depreciation as if the bonus election had not been made, recovering the deduction over the asset's regular life. The full 100% federal deduction is unaffected and lands in year one; only the Idaho portion is recovered over time. |
| Illinois | Decoupled | Illinois decouples even from 100% bonus depreciation: the bonus amount is added back with an offsetting subtraction equal to regular depreciation each year, so the deduction is recovered over the asset's life on the Illinois return. For tax years beginning in 2026, Illinois extended the same addback to the new federal qualified production property deduction. The full 100% federal deduction is unaffected and lands in year one; only the Illinois portion is recovered over time. |
| Indiana | Decoupled | Indiana requires an addback of federal bonus depreciation, with the difference recovered through larger state depreciation deductions over the asset's remaining life. The full 100% federal deduction is unaffected and lands in year one; only the Indiana portion is recovered over time. |
| Iowa | Conforms | Iowa conforms fully to federal bonus depreciation for property placed in service in tax years beginning on or after January 1, 2021, and follows the current federal code, so the permanent 100% rate applies on the Iowa return. |
| Kansas | Conforms | Kansas follows the current federal code with no bonus depreciation addback, so the 100% federal deduction flows straight through to the Kansas return. |
| Kentucky | Decoupled | Kentucky excludes bonus depreciation from its federal conformity and caps Section 179 at $100,000: bonus is added back and property is depreciated under pre-bonus rules over its normal life on the Kentucky return. The full 100% federal deduction is unaffected and lands in year one; only the Kentucky portion is recovered over time. |
| Louisiana | Conforms | Louisiana decoupled from the federal provision but created its own permanent, elective 100% bonus depreciation for tax years beginning on or after January 1, 2025, so full first-year expensing remains available by election on the Louisiana return. |
| Maine | Decoupled | Maine requires an addback of federal bonus depreciation, recovered through subtraction modifications in later years, and its late-2025 conformity direction kept bonus depreciation decoupled. The full 100% federal deduction is unaffected and lands in year one; only the Maine portion is recovered over time. |
| Maryland | Decoupled | Maryland decouples from bonus depreciation: the bonus amount is added back (Form 500DM) and depreciation is recomputed and recovered over the asset's regular life on the Maryland return. The full 100% federal deduction is unaffected and lands in year one; only the Maryland portion is recovered over time. |
| Massachusetts | Decoupled | Massachusetts has disallowed bonus depreciation since 2002: the bonus amount is added back and normal depreciation applies on the Massachusetts return, so the state benefit arrives over the asset's life. The full 100% federal deduction is unaffected and lands in year one; only the Massachusetts portion is recovered over time. |
| Michigan | Partial | Michigan's late-2025 legislation froze individual conformity at the federal code as of the end of 2024, so individuals and pass-throughs get only the older phase-down rates (20% bonus in 2026, none from 2027), while C corporations add back all bonus depreciation. The full 100% federal deduction is unaffected and lands in year one; only the Michigan portion is recovered over time. |
| Minnesota | Partial | Minnesota requires an addback of 80% of federal bonus depreciation in year one, deducted back in equal installments over the following five years, so about a fifth of the state benefit lands in year one and the rest is spread. The full 100% federal deduction is unaffected and lands in year one; only the Minnesota portion is recovered over time. |
| Mississippi | Conforms | Mississippi enacted its own permanent 100% full expensing in 2023, so complete first-year write-offs are allowed on the Mississippi return regardless of federal changes. |
| Missouri | Conforms | Missouri follows the current federal code with no bonus addback, so the permanent 100% bonus depreciation flows through automatically on the Missouri return. |
| Montana | Conforms | Montana follows the current federal code and allows federal bonus depreciation in full on the state return. |
| Nebraska | Conforms | Nebraska follows the current federal code with no bonus depreciation addback, so the 100% federal deduction passes through to the Nebraska return. |
| Nevada | No income tax | Nevada has no personal or corporate income tax, so there is no state-level bonus depreciation question: the federal benefit is the whole story. |
| New Hampshire | No income tax | New Hampshire has no broad personal income tax, so most individually held rentals face no state-level question. Larger rental operations subject to the Business Profits Tax get no bonus depreciation, which that tax expressly disallows. The full 100% federal deduction is unaffected and lands in year one. |
| New Jersey | Decoupled | New Jersey disallows bonus depreciation under both the gross income tax and the corporation business tax: the bonus amount is added back and assets are depreciated under regular state schedules. The full 100% federal deduction is unaffected and lands in year one; only the New Jersey portion is recovered over time. |
| New Mexico | Decoupled | New Mexico decoupled from federal bonus depreciation under Senate Bill 151, signed March 11, 2026 and effective May 20, 2026: the bonus amount is added back and New Mexico depreciation is computed under the regular federal schedules instead. The full 100% federal deduction is unaffected and lands in year one; only the New Mexico portion is recovered over time. |
| New York | Decoupled | New York State and New York City have decoupled from bonus depreciation since 2003: the bonus amount is added back and New York depreciation is computed as if no bonus had been claimed, recovered over the asset's regular life. The full 100% federal deduction is unaffected and lands in year one; only the New York portion is recovered over time. |
| North Carolina | Partial | North Carolina requires an addback of 85% of federal bonus depreciation, deducted back in equal installments over the following five years, so about 15% of the state benefit lands in year one and the rest is spread. The full 100% federal deduction is unaffected and lands in year one; only the North Carolina portion is recovered over time. |
| North Dakota | Conforms | North Dakota follows the current federal code with no bonus addback, so the full 100% federal deduction applies on the state return. |
| Ohio | Partial | Ohio individuals add back five-sixths of federal bonus depreciation in year one and deduct one-sixth in each of the following five years, so most of the state benefit is deferred rather than lost. The full 100% federal deduction is unaffected and lands in year one; only the Ohio portion is recovered over time. |
| Oklahoma | Conforms | Oklahoma made 100% full expensing permanent by state statute in 2022, the first state to do so, so full first-year write-offs apply on the Oklahoma return regardless of federal law. |
| Oregon | Decoupled | Oregon decoupled from federal bonus depreciation under Senate Bill 1507, signed April 9, 2026, for property placed in service in tax years beginning on or after January 1, 2026: the bonus amount is added back and Oregon allows the depreciation the pre-2018 federal rules would have permitted. The full 100% federal deduction is unaffected and lands in year one; only the Oregon portion is recovered over time. |
| Pennsylvania | Decoupled | Pennsylvania's personal income tax does not allow bonus depreciation (regular depreciation methods only), and its corporate tax requires a bonus addback recovered through normal depreciation. Pennsylvania's late-2025 legislation also decoupled from other new federal expensing provisions. The full 100% federal deduction is unaffected and lands in year one; only the Pennsylvania portion is recovered over time. |
| Rhode Island | Decoupled | Rhode Island has required a full bonus depreciation addback since 2002, with property depreciated under regular schedules on the state return, and its 2025 budget broadly decoupled from the new federal law. The full 100% federal deduction is unaffected and lands in year one; only the Rhode Island portion is recovered over time. |
| South Carolina | Decoupled | South Carolina's annual federal conformity permanently excludes bonus depreciation: the bonus amount is added back and assets are depreciated under regular schedules on the South Carolina return. The full 100% federal deduction is unaffected and lands in year one; only the South Carolina portion is recovered over time. |
| South Dakota | No income tax | South Dakota has no personal or corporate income tax, so there is no state-level bonus depreciation question: the federal benefit is the whole story. |
| Tennessee | No income tax | Tennessee has no personal income tax, so there is no state-level question for individually held rentals. Entities subject to Tennessee's franchise and excise tax follow only the older phase-down rates (20% in 2026, none after) rather than the permanent federal 100%. The full 100% federal deduction is unaffected and lands in year one. |
| Texas | No income tax | Texas has no personal income tax, so there is no state-level bonus depreciation question for individually held rentals: the federal benefit is the whole story. Entities filing the Texas franchise tax follow the current federal code, so 100% bonus flows into cost-of-goods-sold depreciation beginning with 2026 reports. |
| Utah | Conforms | Utah follows the current federal code with no bonus addback, so the permanent 100% bonus depreciation applies in full on the Utah return. |
| Vermont | Decoupled | Vermont disallows bonus depreciation: the bonus amount is added back, with the difference recovered through higher state depreciation deductions over the asset's remaining life. The full 100% federal deduction is unaffected and lands in year one; only the Vermont portion is recovered over time. |
| Virginia | Decoupled | Virginia's early-2026 conformity law kept its permanent decoupling from bonus depreciation: the bonus amount is added back and Virginia depreciation is recomputed without it over the asset's normal life. The full 100% federal deduction is unaffected and lands in year one; only the Virginia portion is recovered over time. |
| Washington | No income tax | Washington has no income tax (its business tax applies to gross receipts with no depreciation deductions), so there is no state-level bonus depreciation question: the federal benefit is the whole story. |
| West Virginia | Conforms | West Virginia historically allows federal bonus depreciation in full with no addback. It conforms to the federal code as of a fixed date updated each year, so have your preparer confirm the current-year update captured the permanent 100% federal rate. |
| Wisconsin | Decoupled | Wisconsin computes depreciation under the federal code as it stood in 2014, so no bonus depreciation is allowed and assets are depreciated under regular schedules (Wisconsin does follow current federal Section 179 limits). The full 100% federal deduction is unaffected and lands in year one; only the Wisconsin portion is recovered over time. |
| Wyoming | No income tax | Wyoming has no personal or corporate income tax, so there is no state-level bonus depreciation question: the federal benefit is the whole story. |
Last reviewed August 2026. Educational reference, not tax advice. The table was checked against state revenue guidance and national conformity analyses from Tax Foundation, RSM, Grant Thornton, Forvis Mazars, and KBKG; several states legislate on conformity annually. Federal methodology reference: IRS Publication 5653. Confirm current state treatment before filing.
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