State depreciation overview

Alerts and notices

Overview

Each client can calculate up to 50 state depreciation treatments and ACE and AMT treatments for each state.

State treatments can be set up:

  • automatically when an UltraTax CS state return that requires a state treatment is added to the client. If appropriate, state AMT and state ACE treatment columns are also added to the client.
  • through the Add State Treatment dialog. This dialog opens automatically when a situs for which a state treatment has not been enabled is added to the client.
  • manually using the Setup > Treatment dialog. For information about this process, see Setting up treatments.

State treatments calculate based on the bonus depreciation laws and section 179 limits applicable to the state postal code entered in the Setup > Treatments > Classify dialog. You can override a treatment's section 179 limits.

A state treatment transfers to the UltraTax CS state return that matches the state postal code entered for that treatment in the Setup > Treatments > Classify dialog (except when not applicable. See "The depreciation treatment is not applicable for some states" section below for more information). The following treatments also transfer to UltraTax CS returns.

  • The NYC treatment transfers to the New York City return.
  • The NJ 30% bonus treatment transfers to the New Jersey return for 1120, 1065, and 1041 clients.
  • The PA Straight Line treatment transfers to the Pennsylvania return for 1120S and 1065 clients.
  • The CA AMT and IA AMT treatments transfer to the California (1120, 1065, 1040, and 1041) and Iowa (1120) returns, respectively. If the treatments are not set up, the adjustments will be calculated using the Tax AMT amounts.
  • The CA ACE and the IA ACE treatments transfer to the California (1120 and 1065) and Iowa (1120) returns, respectively. If the treatments are not set up, the adjustments will be calculated using the Tax ACE amounts.

The depreciation treatment is not applicable for some state returns

For some states, the depreciation treatment is not needed and will not be used by the UltraTax CS state return. The treatment will not be set up automatically when that UltraTax CS state return is added to the client.

Depreciation may not be applicable for the following reasons.

  • The state return is not an income tax return.
  • State depreciation is not calculated differently from federal depreciation.
  • The state adjustment for the federal bonus depreciation is an addback of the amount taken on a federal form (rather than the difference between depreciation calculated with the bonus and depreciation calculated without the bonus). These states include:
    • 1040 & 1065 entities: CT, FL, IL, MN*, NC, NE, and OH
    • 1120C entities: FL, IL, MN*, NC, NE, OH, OK, and PA*
    • 1120S entities: CT, FL, IL, MN*, NC, NE, and OH
    • 1041 entities: AZ, FL, IL, MN*, NC, NE, OH, and OK

*Pennsylvania and Minnesota no longer do an addback for assets placed in service on or after 9/27/17.