Federal tax rules allow businesses to take advantage of bonus depreciation and Section 179 expensing to immediately deduct the cost of certain qualifying assets. However, state tax treatment does not always follow federal law.
Many states either decouple entirely, partially conform, or require depreciation adjustments over multiple years. Because of this, tax professionals must carefully review state rules when preparing business returns.
Below is a state-by-state overview of conformity with federal bonus depreciation and Section 179 expensing provisions as of the end of 2025.
State Conformity Overview
| State | Bonus Depreciation | Fed Sec 179 Expense Amt | Notes |
| Alabama | Yes | Yes | |
| Arkansas | Yes | Yes | |
| Arizona | No | No | Sec 179 limit – $25,000 |
| California | No | No | Sec 179 limit – $25,000 |
| Colorado | Yes | Yes | |
| Connecticut | Over 4 years | Over 4 years | |
| Delaware | Yes | Yes | |
| District of Columbia | No | No | Sec 179 limit – $25,000 |
| Georgia | No | Partially | Sec 179 – Complies for machinery and equipment. Does not allow Sec. 179 for real property |
| Hawaii | No | No | Sec 179 limit – $25,000 |
| Idaho | No | Yes | |
| Illinois | Yes | Yes | |
| Indiana | No | No | Sec 179 limit – $25,000 |
| Iowa | Yes | Yes | |
| Kansas | Yes | Yes | |
| Kentucky | No | No | Sec 179 limit – $100,000 |
| Louisiana | Yes | Yes | |
| Maine | No | Yes | |
| Maryland | No | No | Sec 179 limit – $25,000 |
| Massachusetts | No | Yes | |
| Michigan | No | Yes | |
| Minnesota | Over 6 years | Yes | Bonus Depreciation – 20% the first year, the rest equally over the next 5 years |
| Mississippi | Yes | Yes | |
| Missouri | Yes | Yes | |
| Montana | Yes | Yes | |
| Nebraska | Yes | Yes | |
| New Hampshire | No | No | Sec 179 limit – $500,000 |
| New Jersey | No | No | Sec 179 limit – $25,000 |
| New Mexico | Yes | Yes | |
| New York | No | Yes | |
| North Carolina | Over 6 years | Over 6 years | Bonus Depreciation & Sec 179– 15% 1st yr, 20% each year for next 5 years |
| North Dakota | Yes | Yes | |
| Oklahoma | Yes | Yes | |
| Ohio | Over 6 years | Over 6 years | Bonus Depreciation/Sec 179 – 1/6 1st year, 1/5 each year for the next 5 years |
| Oregon | Yes | Yes | |
| Pennsylvania | No | Yes | |
| Rhode Island | No | Yes | |
| South Carolina | No | Yes | |
| Utah | Yes | Yes | |
| Vermont | No | Yes | |
| Virginia | No | Yes | |
| West Virginia | No | Yes | |
| Wisconsin | No | Yes | |
Why This Matters for Tax Professionals
Because many states do not fully conform to federal bonus depreciation or Section 179 rules, adjustments may be required when preparing state returns. These differences can impact:
- Depreciation schedules
- State taxable income calculations
- Asset planning strategies for business clients
- Multi-state business filings
Understanding how each state handles these provisions helps ensure accurate filings and proper tax planning for business clients.
