California conformity · IRC §168(k)
Does California Conform to Bonus Depreciation?
Short answer
No. California does not conform to the federal 100% additional first-year depreciation deduction under IRC §168(k).
Property that qualifies for federal bonus depreciation can therefore have a different California deduction and tax basis, requiring separate state depreciation tracking.
Key facts
The figures and limits at a glance
California conformity
No
California does not conform to the federal 100% bonus-depreciation provision.
Federal provision
IRC §168(k)
The federal additional first-year depreciation rule.
Relevant CA sections
§§17250, 24349
Personal-income-tax and corporation-tax provisions relevant to the California adjustment.
Primary authority
Open the sources behind the answer
California FTB summary of federal tax changes
The Franchise Tax Board conformity table identifies California’s treatment of the federal 100% bonus-depreciation provision.
California Revenue and Taxation Code §17250
The California personal-income-tax modification addressing federal additional first-year depreciation.
IRC §168 — Accelerated cost recovery system
The federal depreciation section containing the additional first-year depreciation rules.
A federal deduction can require a California adjustment
When property receives federal bonus depreciation, the California basis and depreciation schedule may differ. The California return generally needs an adjustment that preserves California’s separate treatment.
- →Maintain separate federal and California depreciation records for affected property.
- →Track basis differences because they can affect later-year depreciation and gain or loss on disposition.
- →Confirm the taxpayer type and operative California provisions before preparing the adjustment.
The federal rule changed; California’s conformity answer did not
Federal law made 100% additional first-year depreciation permanent for certain qualified property acquired after January 19, 2025. The California Franchise Tax Board identifies that federal change as a provision to which California does not conform.
- →The federal acquisition and placed-in-service requirements still determine the federal result.
- →California’s nonconformity requires a separate state analysis rather than carrying the federal deduction directly onto the California return.
Questions and answers
What practitioners ask next
Does California conform to 100% federal bonus depreciation?
No. The California Franchise Tax Board states that California does not conform to the federal additional first-year depreciation provision under IRC §168(k).
Does California use federal depreciation automatically?
No. California has specific conformity dates and modifications, including nonconformity to federal bonus depreciation, so federal and California depreciation can differ.
Why does the difference matter after the first year?
A different first-year deduction creates different federal and California bases. Those basis differences can affect depreciation in later years and gain or loss when the property is sold.
Which California provisions should a practitioner check?
The FTB identifies Revenue and Taxation Code sections 17201, 17250, and 24349 as relevant to this federal change, depending on the taxpayer and tax regime.
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