Federal Conformity-- Asset Expense Elections under IRC §179

CCH’s September 7th. State Tax Review had an article about state conformity to Internal Revenue Code §179.

The Jobs & Growth Tax Relief Reconciliation Act (PL 108-27) increased the expense limitation from $25,000 to $100,000, and the investment limitation from $200,000 to $400,000 back in 2003.

The American Jobs Creation Act of 2004 (PL 108-357) extended the Sec. 179 asset & investment limitation expiration date to Dec. 31, 2007, provides that off-the-shelf computer software qualifies for expensing, and, for vehicles put in service after Oct. 22, limits the cost of sports utility vans that can be expensed to $25,000 if it’s exempt from Sec. 280F depreciation limits.

But response to the provisions has been varied among the states, and that neither Ohio, Indiana, nor Kentucky statutes conform to IRC Sec. 179, according to the article. The Ohio Dept. of Taxation has an information release posted which explains the amount of allowable depreciation expense deductions for corporate or franchise and personal income tax purposes including examples of IRC §179 depreciation expense addbacks.