Bonus depreciation and the Schedule 1-A deductions, state by state
Positions as stated on our two comparison pages, each read from the state revenue department. A dash means that comparison page does not list the state yet.
| State | Bonus depreciation | Tips, overtime and the other Schedule 1-A deductions |
|---|---|---|
| District of Columbia | — | does not recognize any of the Schedule 1-A deductions. |
| Nebraska | rolling conformity; the DOR expects the federal expensing changes to reduce Nebraska tax for pass-through owners. | no automatic effect, because the deductions sit below federal AGI. |
| New Jersey | — | no effect, because the Gross Income Tax does not start from federal AGI. |
| New York | separate depreciation schedule for 168(k) property on Form IT-398 (CT-399 for corporations); also decoupled from the qualified production property write-off. | — |
| North Carolina | add back 85% for 2025, then deduct 20% a year for five years from 2026. | does not conform to the Schedule 1-A deductions. |
| Oregon | disallows bonus depreciation from tax year 2026 under SB 1507, subject to a referendum petition. | clients may be able to claim the same tips, overtime and vehicle loan interest deductions on 2025 returns (OR-17). |
| Pennsylvania | does not follow federal bonus depreciation. | tips remain taxable compensation. |
| Rhode Island | decouples from the higher section 179 limits and the 174A expensing for 2025. | does not allow the tips, overtime or vehicle loan deductions. |
| South Carolina | specifically does not adopt the 2025 section 168(k) changes. | had not considered the changes as of March 2026; taxpayers must adjust. |
| Tennessee | stays on the TCJA phase-down, 40% for 2025 assets and 20% for 2026, with the excess added back on Schedule J. | — |
| Utah | — | no effect on the Utah return, for the same reason. |
| Virginia | bonus depreciation remains an existing exception; also deconforms from 168(n) and the higher section 179 limits. | — |
| Wisconsin | does not follow any bonus depreciation enacted after January 1, 2014, but does follow federal section 179. | has not adopted the tips, overtime, car loan or senior deductions. |
From each state’s revenue department, as cited on the two comparison pages.