50-State Section 179 Comparison Matrix
Compare first-year deduction caps, bonus depreciation conformity, and state add-back adjustments side-by-side across major commercial states.
| State Jurisdiction | State Section 179 Cap | Phase-Out Threshold | State Bonus Depreciation | Statutory Code Citation | Conformity Status |
|---|---|---|---|---|---|
| California (CA) | $25,000 | $200,000 | Disallowed (0%) | CA Rev. & Tax Code § 17201 |
Strict Non-Conformity |
| Texas (TX) | $1,250,000 | $3,130,000 | 100% Conforming | Tex. Tax Code § 171.1011 |
Full Alignment (0% Income Tax) |
| Wyoming (WY) | $1,250,000 | $3,130,000 | 100% Conforming | Wyo. Stat. § 39-13-107 |
Full Alignment (0% Income Tax) |
| Florida (FL) | $1,250,000 | $3,130,000 | 100% Conforming | Fla. Stat. § 220.13 |
Full Corporate Alignment |
| New York (NY) | $1,250,000 | $3,130,000 | Disallowed (Add-Back) | N.Y. Tax Law § 612(k) |
Partial Conformity |
| Pennsylvania (PA) | $25,000 | $200,000 | Disallowed (0%) | 72 P.S. § 7303 |
Strict Non-Conformity |
| New Jersey (NJ) | $25,000 | $200,000 | Disallowed (0%) | N.J.S.A. § 54A:5-1 |
Strict Non-Conformity |
| Georgia (GA) | $1,250,000 | $3,130,000 | Disallowed (Add-Back) | O.C.G.A. § 48-7-21 |
Partial Conformity |
State Tax Conformity Mechanics: Rolling, Static, and Non-Conforming Jurisdictions
While federal tax law under IRC § 179 provides a standardized $1,250,000 deduction cap and $3,130,000 phase-out threshold for Tax Year 2026, individual state tax codes treat capital expenditure expensing in three distinct ways:
- Rolling Conformity States (e.g., Texas, Florida, Colorado, Illinois, Ohio): Automatically adopt the Internal Revenue Code (IRC) as currently amended. These states automatically conform 100% to federal Section 179 limits ($1.25M) and 100% Bonus Depreciation without requiring annual legislative action.
- Static (Fixed-Date) Conformity States (e.g., Georgia, Virginia, Idaho): Conform to the Internal Revenue Code as of a specific historical date (e.g., January 1, 2023). While Section 179 caps usually align, Bonus Depreciation or specific energy incentives may require state add-back adjustments.
- Strict Non-Conforming States (e.g., California, Pennsylvania, New Jersey, New York): Decouple from federal tax policy by imposing statutory state caps (e.g. $25,000 Cap in CA, PA, and NJ) or disallowing federal 100% Bonus Depreciation entirely.
Managing Dual Federal vs. State Depreciation Schedules & Tax Add-Backs
When a business operates or purchases commercial assets in a non-conforming state, tax preparers and CPAs must maintain two distinct depreciation schedules:
Example (California Asset Purchase): A business acquires $145,000 of commercial equipment in Tax Year 2026. On Federal Form 4562 (Line 6), the business claims a full $145,000 Section 179 deduction, writing off 100% of the cost against federal taxable income. However, for California state tax returns (Form 540 / Form 100), California caps Section 179 at $25,000 and disallows Bonus Depreciation. The remaining $120,000 basis must be added back to California income and depreciated over its 5-year or 7-year MACRS recovery period using California state depreciation tables.
50-State Conformity FAQ
A: California (CA Rev. & Tax Code § 17201), New Jersey (N.J. Stat. § 54A:5-1), and Pennsylvania (72 P.S. § 7303 for sole proprietorships & pass-through entities) enforce strict $25,000 statutory caps with $200,000 phase-out thresholds.
A: States with no individual or corporate income tax (such as Texas, Wyoming, Washington, Nevada, South Dakota, Alaska, and Florida) automatically reflect federal tax treatment without state add-back adjustments.