Pennsylvania’s Department of Revenue issued a Corporation Tax Bulletin 2011-01 on February 24th, 2011. The Bulletin was issued to provide taxpayers and tax preparers guidance with regards to handling the 100% federal bonus depreciation for Pennsylvania Corporate Net Income Tax. Pennsylvania is informing taxpayers that they will take the position that assets subject to the federal 100% bonus depreciation will be allowed to deduct these amounts for Pennsylvania purposes in the same year as federal. Those assets subject to 100% bonus depreciation will not be included in Pennsylvania’s RCT-101, Schedule C – Adjustment for Bonus Depreciation. The schedule will still be used for assets subject to the 30% and 50% bonus depreciation. In addition, Pennsylvania also provided guidance that they allow the full recovery of 30% and 50% depreciation disallowed in previous years in the year in which a complete write-off of the assets occur for federal purposes.
The Construction Professionals at McKonly and Asbury, LLP will continue to provide updates on this issue as the issue moves forward during tax season. If you have any questions or concerns, please feel free to contact the Construction Professionals of McKonly and Asbury, LLP.