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2022 Proforma to 2023 - Depreciation Does Not Transfer ‘-1’ for SDA, State if Different


This unexpected behavior was originally identified in Individual taxes, in late November and quickly addressed in a program update available November 29, 2023.

Later it was discovered that this same behavior was experienced in Corporate returns, and was then addressed in a program update for both Corporate and S Corporate returns available January 17, 2024.

This behavior was specific to any depreciation asset that contained prior Special Depreciation Allowance (SDA) for federal and -1 for state in 2022 (sample below).


When transferring the client to 2023 using the Transfer/Create new return, the Prior special depreciation allowance for the Federal (10,000 in the image above) is transferred to 2023. However, the -1 for state is not transferred.

Next Step - Client Files Transferred Prior to Program Updates:

You may want to either:

  1. Re-proforma any clients impacted by this behavior from 2022 to 2023.
    • This action will create a new 2023 return.  If substantial work has already been done in 23, you may want to perform the following.
  2. Manually adjust the 2023 depreciation input by entering a ‘-1’ in the state if different column for the Prior special depreciation allowance field.

Additional Information:

States that do not conform to Federal SDA which are more likely to include the ‘-1’ transferred item:

Arkansas                        Illinois                     New Jersey
Arizona                           Indiana                   New York
California                        Kentucky                Pennsylvania
Connecticut                    Massachusetts       Rhode Island
District of Columbia        Maryland                South Carolina
Florida                            Maine                      Texas
Georgia                          Michigan                 Virginia
Hawaii                            Mississippi              Vermont
Idaho                             New Hampshire       Wisconsin

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