My understanding is this is a known issue with some states (New York, Arizona, Illinois, and possibly some others) where the passive loss is limited, but then the state addition is still added on top of it, and so you end up with this "phantom income" issue.

According to the information I've found on this, it's not a tax software mistake, or a mistake at all. It's the actual reality of the correct reporting, and the result of bad state tax law.  To quote someone else's article on this issue:  

"Do you see the problem here?! Despite the fact that you did not deduct the passive loss, which was the original source of the bonus depreciation, New York still makes you add back the bonus depreciation (which you never deducted in the first place)!"

Yes, this situation is absurd.  But apparently, if you want to report it correctly, this is what it is.  It does at least later reduce their tax obligation to the state when the investment has a net profit in the future.