Yes. New York allows the federal Section 179 depreciation deduction in full, with one narrow exception for heavy sport utility vehicles. If you expense qualifying equipment, software, or improvements under Section 179 on your federal return, that same deduction flows through to your New York return without any add-back or separate state schedule.
New York Tax Law Section 612 spells out every modification required to convert federal adjusted gross income to New York adjusted gross income, and a general add-back of Section 179 is not on the list.1New York State Senate. New York Tax Law 612 – New York Adjusted Gross Income of a Resident Individual So if you write off $500,000 of equipment federally under Section 179, you deduct the same $500,000 for New York purposes. The federal dollar limits apply unchanged: for tax years beginning in 2025, the maximum Section 179 deduction is $2,500,000, phasing out dollar-for-dollar once qualifying purchases exceed $4,000,000.2Internal Revenue Service. Instructions for Form 4562 (2025)
The One Exception: Heavy SUVs
New York Tax Law Section 612(b)(36) requires you to add back the entire federal Section 179 deduction if the property is a sport utility vehicle weighing more than 6,000 pounds that is not classified as a passenger automobile under IRC Section 280F(d)(5).1New York State Senate. New York Tax Law 612 – New York Adjusted Gross Income of a Resident Individual The modification code is A-208, reported on Form IT-225.3New York State Department of Taxation and Finance. Instructions for Form IT-225 New York State Modifications
The definition matters. For this purpose, a sport utility vehicle is a four-wheeled passenger vehicle primarily manufactured for use on public roads. Several vehicle types are specifically excluded: trucks with an attached cargo area, vans, ambulances, hearses, and vehicles used directly for transporting persons or property for hire. If your heavy vehicle falls into one of those categories, the Section 179 deduction passes through to New York unchanged.
Eligible farmers, as defined for purposes of the farmers’ school tax credit, are also exempt from the SUV add-back.
If business use of the SUV later drops to 50% or below and you have a federal Section 179 recapture, New York gives you a corresponding subtraction modification under Section 612(c)(37), so the same income is not taxed twice.1New York State Senate. New York Tax Law 612 – New York Adjusted Gross Income of a Resident Individual
Don’t Confuse Section 179 with Bonus Depreciation
This is where most of the confusion about New York and Section 179 comes from. Section 179 and federal bonus depreciation under IRC Section 168(k) are two different ways to accelerate a write-off, and New York treats them very differently.
Section 179 is allowed. Bonus depreciation is not.
Federally, the One Big Beautiful Bill Act restored a permanent 100% first-year bonus depreciation deduction for qualifying property acquired after January 19, 2025.4Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill New York requires you to add back the entire federal 168(k) depreciation amount on any such property placed in service after May 31, 2003, with limited exceptions for qualified resurgence zone property and New York Liberty Zone property.5New York State Department of Taxation and Finance. Form IT-398 New York State Depreciation Schedule for IRC Section 168(k) Property The modification code is A-209, computed on Form IT-398, and you then depreciate the asset over its useful life for state purposes.
The practical takeaway: if you want to accelerate a deduction and have the state follow federal treatment, elect Section 179 rather than relying on bonus depreciation. For a $300,000 piece of equipment, electing Section 179 gives you the full write-off on both returns in the same year. Taking the 100% bonus deduction instead gives you the full federal write-off but forces a $300,000 add-back on your New York return, with recovery spread over the asset’s useful life.
Filing the Heavy SUV Add-Back
When the heavy-SUV exception applies, report the federal Section 179 amount for that vehicle as modification A-208 on Form IT-225, New York State Modifications. The amount transfers into the calculation of your New York adjusted gross income.3New York State Department of Taxation and Finance. Instructions for Form IT-225 New York State Modifications
Keep records that identify the vehicle, its gross vehicle weight, how you determined it falls within or outside the SUV definition, and the federal Section 179 amount claimed. If business use later changes and triggers a federal recapture, you will need the same records to support the matching subtraction modification under code S-210 in that later year.
If you are a partner in a partnership or a shareholder in an S corporation that owns the SUV, the modification flows through to you based on your distributive share, and you report your share on your personal IT-225.6Legal Information Institute (LII) / Cornell Law School. 20 NYCRR 117.3 – Modification of Partnership Items in Partners New York State Personal Income Tax Return Nonresident partners report only the portion connected with New York sources.7Legal Information Institute (LII) / Cornell Law School. 20 NYCRR 137.3 – Modification of Partnership Items in Partners New York State Nonresident Personal Income Tax Return
What Qualifies for Section 179 in the First Place
Because New York follows the federal rules, the qualifying-property list is the federal list. Section 179 covers tangible personal property such as machinery, computers, and vehicles, along with off-the-shelf computer software used predominantly for business. Certain improvements to nonresidential real property also qualify, including roofs, HVAC systems, fire protection and alarm systems, and security systems.8Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets
The federal income limit also carries over in practice: Section 179 cannot create or increase a net loss, because the deduction is capped at your total taxable income from the active conduct of a trade or business. Any amount disallowed by that limit carries forward to future years federally, and because New York starts from the federal number, the state deduction tracks that same carryforward.
Penalties if You Get It Wrong
The modification rules cut both ways. Forgetting the heavy-SUV add-back understates your New York tax. If the understatement exceeds 10% of the correct tax or $2,000, whichever is greater, the penalty is 10% of the shortfall. If the error is treated as negligent, the penalty is 5% of the underpayment plus 50% of the interest owed, with interest compounding daily at rates adjusted quarterly.9New York State Department of Taxation and Finance. Interest and Penalties
The same symmetry applies to a missed recapture subtraction in a later year: you simply overpay. The state will not correct the mistake for you, and you would need to file an amended return to recover the overpayment.