Bonus Depreciation/Section 179
The Association is working to correct statutes that would result in permanent loss of add-back deductions from Section 179, which was likely an unintended consequence of previous legislation. State law requires businesses to add back 85% of Section 179 above the state limit and federal bonus. The add-back amount is then taken as a deduction in 20% increments over the succeeding five years. There are peculiarities with the way the law is written that would cause businesses to permanently lose the 20% deductions if they do not have taxable state income in the year the deduction is allowed. The Tax Cuts and Jobs Act significantly increased federal deductions available under these provisions, which makes correcting North Carolina’s statutes more important to taxpayers.