Rhode Island Section 179 Depreciation
Section 179 depreciation allows businesses to deduct the full cost of qualifying equipment and software in the year it is placed in service, rather than depreciating it over time. In Rhode Island, this deduction is subject to specific state rules and limitations.
Key Points for Rhode Island Residents
- State Limitation: Rhode Island limits the Section 179 deduction to $25,000 for tax year 2025, regardless of federal allowances. This is under the Jobs & Growth Tax Relief Reconciliation Act of 2003.
- Adjustments Required: If federal bonus depreciation or increased Section 179 deductions were not taken, these must be subtracted from Rhode Island income. This is specified in R.I. Gen. Laws § 44-61-1 and § 44-61-1.1.
- Reporting on Form RI-1040: Residents must report adjustments related to Section 179 depreciation on Line 1i and Line 1j of Form RI-1040. These lines account for depreciation not taken federally due to bonus depreciation or increased Section 179 limits.
- Amortization of Research Expenditures: For Section 174A research and experimental expenditures, Rhode Island allows amortization for tax year 2025. This is reported on Schedule 174A.
How to Report
When filing Form RI-1040, taxpayers must adjust their federal income by subtracting any Section 179 depreciation that was not claimed federally due to bonus depreciation or increased limits. This ensures Rhode Island tax liability is calculated correctly based on state-specific rules.
Source:
Form RI-1040 Instructions
Schedule 174A
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions.