A cost segregation study creates 2 distinct benefits, and states treat them differently. The first is reclassification: an engineering-based study moves components of a building from 27.5 or 39 year recovery into 5, 7, and 15 year MACRS classes under IRS Pub 946. The second is bonus depreciation: IRC section 168(k) lets you deduct those short-life components immediately, at 100% for qualified property acquired after January 19, 2025 under the One Big Beautiful Bill Act, or at the phase-down rates (80% for 2023, 60% for 2024, 40% for 2025 placements) for property acquired on or before that date.
Reclassification usually survives at the state level
Most states start their income calculation from federal taxable income or federal adjusted gross income, and most accept MACRS class lives as-is. So the 5, 7, and 15 year assignments from a cost segregation study flow into state returns in nearly every state. Even where bonus is blocked, carpet on a 5 year life deducts far faster than carpet buried in a 39 year building.
Bonus depreciation is where states split
California disallows IRC 168(k) entirely, with adjustments reported on FTB Form 3885A. Indiana has decoupled since 2002 per Indiana Information Bulletin #118. Florida's corporate income tax requires an addback recovered over the following 7 years under Florida Statutes section 220.13. In states like these, the year 1 federal deduction gets added back and returns as ordinary MACRS depreciation over the 5, 7, or 15 year life. States with rolling conformity and no carve-out allow bonus in full.
States with no income tax
If your property and your residence both sit in a state with no personal income tax, such as Florida or Texas, the state question largely disappears for individual owners. Watch entity-level taxes, though: Florida's corporate income tax and similar regimes can still require addbacks for property held in a C corporation.
The Form 3115 catch-up at the state level
If you under-depreciated in prior years, the federal fix is Form 3115 with a section 481(a) adjustment: a favorable catch-up is deducted in full in the year of change instead of amending prior returns, per the Form 3115 instructions. Because most states start from federal income, the catch-up flows into the state return automatically, and nonconforming states then adjust only the bonus component. Your state section 481(a) amount can therefore differ from the federal one, which is normal and expected.
What this does to a sale
Separate state schedules mean separate state basis. In a nonconforming state you will have taken less depreciation by the time you sell, so state gain, and any state treatment of recapture, will differ from the federal numbers.
Where Amadae fits
Amadae's cost segregation screen models both layers: the federal benefit with bonus, and the state benefit under each state's addback rules. Amadae does not perform engineering studies. It screens the property, coordinates with an engineering study firm when a full study is warranted, prepares the Form 3115 catch-up for look-backs, and files federal and state returns with both schedules reconciled.