Why is there a depreciation adjustment on my Massachusetts state return?

Forum|Forum|4 years ago
February 21, 2022
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This is reported on the Federal/State adjustment summary page of the return, as an adjustment to schedule E (column B).

TurboTax Premier Online

Best answer by ZoltanB45

I have not been able to find the worksheet. I also wasn't able to find any information on the nature of the differenced to allow me to make the manual adjustments in the screen that you showed. Thanks!

Did you capitalize any additions to the rental property? Perhaps in prior years, Massachusetts expensed a certain item that you capitalized on the federal tax return. If not last year, then maybe the year before.

MAK70

Usually the Massachusetts adjustment is related to Bonus Depreciation. A Massachusetts taxpayer that claims bonus depreciation for federal purposes must calculate a separate depreciation schedule for purposes of claiming depreciation on the Massachusetts corporate excise return or the Massachusetts personal income tax return. For the year property is placed in service and subsequent years, a taxpayer must calculate Massachusetts depreciation as if the taxpayer elected not to utilize the bonus depreciation allowance.

There is also a state adjustment for some automobiles.

See TIR 03-25.

BigN

Does Turbo Tax make that adjustment for bonus depreciation automatically or do I have to enter that adjustment somewhere manually or indicate somewhere that it needs to be calculated differently for the Mass. return? Seems like the farm income shown on the Mass return is much higher than it should be compared to the Fed. farm income. Looks like it failed to depreciate the asset at all on the Mass return.

MAK70

If you used TurboTax, there should be a state depreciation worksheet that has the Massachusetts amounts and adjustments. Within the Massachusetts state section, you can make any adjustments- look for the screen below. @BigN