# California — State conformity to federal Section 179 and bonus depreciation rules For California, section 179 conformity is conforms with state cap; state section 179 cap is state cap applies (does not conform to TCJA increase to $1 million); state section 179 phase-out is state phase-out applies; bonus depreciation conformity is decouples — requires add-back; add-back rule is California does not conform to bonus depreciation; adjustment required, recorded from its source on 2026-08-15. - **State:** California _(verified: appears in the quote below)_ - **Section 179 conformity:** conforms with state cap - **State Section 179 cap:** state cap applies (does not conform to TCJA increase to $1 million) _(verified: appears in the quote below)_ - **State Section 179 phase-out:** state phase-out applies - **Bonus depreciation conformity:** decouples — requires add-back - **Add-back rule:** California does not conform to bonus depreciation; adjustment required - **Has income tax:** yes ## What the source says > State Follows Bonus Depreciation-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that provides a 100% first-year deduction for the adjusted basis is allowed for qualified property acquired and placed in service after 09/27/2017, and before 01/01/2023. State Follows IRC § 179-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that increases the maximum amount a taxpayer may expense under IRC § 179 to $1 million, increases the phase-out threshold amount to $2.5 million, and provides for indexing for inflation. ## Sources disagree More than one authority states this, and they do not state the same thing. Both are reproduced with the source each came from. ### State Section 179 cap accountants.intuit.com says state section 179 cap is **state cap applies (does not conform to TCJA increase to $1 million)**, as of 2026-08-15. > State Follows Bonus Depreciation-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that provides a 100% first-year deduction for the adjusted basis is allowed for qualified property acquired and placed in service after 09/27/2017, and before 01/01/2023. State Follows IRC § 179-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that increases the maximum amount a taxpayer may expense under IRC § 179 to $1 million, increases the phase-out threshold amount to $2.5 million, and provides for indexing for inflation. Source: https://accountants.intuit.com/support/en-us/help-article/asset-depreciation/state-conformity-special-depreciation-allowance/L27kRyetJ_US_en_US crosslinktax.com says state section 179 cap is **$25,000**, as of 2026-08-15. > Yes | | Arizona | No | No | Sec 179 limit – $25,000 | California | Source: https://www.crosslinktax.com/customer-resources/tax-resource-center/tax-updates/state-compliance-with-federal-bonus-depreciation-and-section-179-expensing-2025/ ecomcpa.com says state section 179 cap is **$25,000**, as of 2026-08-15. > California caps Section 179 at $25,000 with a $200,000 phase-out. Source: https://ecomcpa.com/when-federal-100-bonus-depreciation-doesnt-travel-the-state-conformity-headache-for-ecommerce-sellers-in-2026/ ### State Section 179 phase-out accountants.intuit.com says state section 179 phase-out is **state phase-out applies**, as of 2026-08-15. > State Follows Bonus Depreciation-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that provides a 100% first-year deduction for the adjusted basis is allowed for qualified property acquired and placed in service after 09/27/2017, and before 01/01/2023. State Follows IRC § 179-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that increases the maximum amount a taxpayer may expense under IRC § 179 to $1 million, increases the phase-out threshold amount to $2.5 million, and provides for indexing for inflation. Source: https://accountants.intuit.com/support/en-us/help-article/asset-depreciation/state-conformity-special-depreciation-allowance/L27kRyetJ_US_en_US crosslinktax.com says state section 179 phase-out is **state rules apply**, as of 2026-08-15. > Yes | | Arizona | No | No | Sec 179 limit – $25,000 | California | Source: https://www.crosslinktax.com/customer-resources/tax-resource-center/tax-updates/state-compliance-with-federal-bonus-depreciation-and-section-179-expensing-2025/ ecomcpa.com says state section 179 phase-out is **$200,000**, as of 2026-08-15. > California caps Section 179 at $25,000 with a $200,000 phase-out. Source: https://ecomcpa.com/when-federal-100-bonus-depreciation-doesnt-travel-the-state-conformity-headache-for-ecommerce-sellers-in-2026/ ### Add-back rule accountants.intuit.com says add-back rule is **California does not conform to bonus depreciation; adjustment required**, as of 2026-08-15. > State Follows Bonus Depreciation-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that provides a 100% first-year deduction for the adjusted basis is allowed for qualified property acquired and placed in service after 09/27/2017, and before 01/01/2023. State Follows IRC § 179-TCJA of 2017 : No California does not conform to the Tax Cuts and Jobs Act provision that increases the maximum amount a taxpayer may expense under IRC § 179 to $1 million, increases the phase-out threshold amount to $2.5 million, and provides for indexing for inflation. Source: https://accountants.intuit.com/support/en-us/help-article/asset-depreciation/state-conformity-special-depreciation-allowance/L27kRyetJ_US_en_US crosslinktax.com says add-back rule is **California does not conform to bonus depreciation**, as of 2026-08-15. > Yes | | Arizona | No | No | Sec 179 limit – $25,000 | California | Source: https://www.crosslinktax.com/customer-resources/tax-resource-center/tax-updates/state-compliance-with-federal-bonus-depreciation-and-section-179-expensing-2025/ ecomcpa.com says add-back rule is **The state requires the addback. California allows the asset to depreciate over its MACRS life**, as of 2026-08-15. > California caps Section 179 at $25,000 with a $200,000 phase-out. Source: https://ecomcpa.com/when-federal-100-bonus-depreciation-doesnt-travel-the-state-conformity-headache-for-ecommerce-sellers-in-2026/ ## Source - https://accountants.intuit.com/support/en-us/help-article/asset-depreciation/state-conformity-special-depreciation-allowance/L27kRyetJ_US_en_US - https://www.crosslinktax.com/customer-resources/tax-resource-center/tax-updates/state-compliance-with-federal-bonus-depreciation-and-section-179-expensing-2025/ - https://ecomcpa.com/when-federal-100-bonus-depreciation-doesnt-travel-the-state-conformity-headache-for-ecommerce-sellers-in-2026/ Last verified: 2026-08-15. Review by: 2027-08-15. Part of [State conformity to federal Section 179 and bonus depreciation rules](https://referencesource.org/state-section-179-bonus-depreciation-conformity/).