PA - Section 179 Deduction

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Pennsylvania special rules for Federal Section 179 depreciation expense.

Pennsylvania does not have any statute or regulation concerning Section 179 expenses. For Personal Income Tax purposes, the state allows any generally accepted depreciation method, including Section 179. The maximum deduction using IRC section 179 is $25,000. (Act 89 of 2002 ties the depreciation calculations to the IRC of 1986 as amended to January 1, 1997 limitation. This limits section 179 expenses to $25,000 per entity.)

If a taxpayer/entity used Section 179, the basis of the asset must be adjusted for the amount of depreciation that provided the benefit in the year taken. When the property is sold, the basis is adjusted accordingly. If the depreciation did not provide a benefit in a given taxable year, the taxpayer/entity follows Pennsylvania's tax benefit rules. An entity may not use the enhanced small business expensing under the Jobs and Growth Tax Relief Reconciliation Act.

Since there is no PA legislation citation available, for an official position, please contact the Office of Chief Counsel.

PA Department of Revenue Office of Chief Counsel 10th Floor, Strawberry SquareDepartment 281061Harrisburg, PA 17128-1061 FAX: 717-772-1459

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