Why is there a "Depreciation and Section 179 deduction" on my MA state Schedule C return?

[Pip_12_mn]

Where does the amount for Schedule C Line 11 "Depreciation and Section 179 deduction" on the MA State return come from in Turbotax?  I cannot trace this back to my Federal Return and it causes my MA and Federal Schedule C Net Profit to be different.

My MA state return shows a depreciation adjustment of $10 on an activity worksheet.  It causes a Federal/State adjustment of $10. I was never prohibited from taking a full Section 179 deduction in prior years and there is nothing in the Federal worksheets or depreciation tables that I can trace this back to.

How can I determine what is causing this adjustment in Turbotax?

[KathrynG3 · Accepted solution]

It would be best to confirm the input both on Schedule C and in the state interview. You are correct, there does not appear to be a reason for there to be a difference according to the instructions except for a difference for bonus depreciation on Massachusetts Schedule F, Farm Income or Loss. 

For more information, see: 2020 Massachusetts Form 1 Resident Income Tax Instructions, page 33 is the beginning of the state instructions for Schedule C. Page 35 is the only instruction for depreciation and Section 179 which states: 

Massachusetts adopts the current federal rules at § 179 for expensing certain depreciable business assets. For property placed in service in tax years beginning after December 31, 2013 and before January 1, 2015, the maximum § 179 expensing allowance is $1,000,000.

For more information, see: What is a Section 179 deduction?

[Pip_12_mn]

It turns out in 2018 I used Bonus Depreciation on one item which MA does not allow. Turbotax depreciated the item over 3 years using the SL method on the MA return and this explains the adjustment for Federal vs State.

In Summary: "Massachusetts specifically disallows the bonus depreciation deduction under MGL ch 62, § 2(d)(1)(N)."   I claimed Bonus depreciation on my Federal return in 2018 but MA forced me to depreciate over 3 years which is why it impacted my 2020 MA return. I do not have a negative number on my MA return as others are reporting and my MA return was accepted.

[atc0_99]

I have the same problem -- on my state return it lists a negative number in this field.  I can't figure out how to correct this.  

[RoJoGo]

I have the same issue running TurboTax Home Business on the Mac.  The State (MA) return is showing a negative value and therefore the return is being rejected.  The TurboTax software is offering no help on this topic, and it is unclear how to fix this, with only a few days left to file.

[atc0_99]

is somebody able to help with this issue?  Appears to be common. 

[mmm1958]

This is yet another Turbo Tax glitch.  I highly doubt this is going to be fixed before May 17. I am going to use the MA state tax fillable forms to do the state portion & efile there.   

[Pip_12_mn]

Exactly which line on the MA return is negative?

What is the error message when the Return is rejected?

[RoJoGo]

As the original poster related: Schedule C Line 11 "Depreciation and Section 179 deduction".  The error in the ensuing email from TurboTax regarding the MA state return: F1-1272 - The Schedule C, Line 11 amount cannot be negative. Indeed, the amount in that State return is megative.

When I look at the associated Schedule C forms in my federal return, all the 179-related fields - that I can easily see - are empty. Not exactly sure whre to look, though, so I scanned through all the federal Schedule C-related forms I saw in the left-side navigation portion of the Forms viewer.

Maybe there's a federal deduction that the state does not also give? Could it be that the state's processing is incorrect?

[Pip_12_mn]

If it was me I would try deleting all Assets that were being depreciated (put in service) in 2020 and see if the error  (negative Line 11 result) goes away. Then add them back one at a time to see which one causes the error. In my case Federal and State Schedule C Income were different in 2020 due to an asset put in service on my 2018 return. 

[mmm1958]

I have no assets being depreciated.  Reject Code F1-1272

[atc0_99]

how do you that?

[atc0_99]

I have no assets being depreciated in the first place.  So this would not work.  thanks

[Pip_12_mn]

If there are no assets being depreciated then it  seems like a TT glitch. Depreciation could include Vehicle depreciation and assets placed into service prior years. I would suggest deleting the Schedule C return and re-entering the information. This might clear the error. 

[MC119]

I have the same problem - Federal 179 section is fine, but the state Schedule C line 11 shows a random negative number.  I tried reentering things but the error doesn't clear.  I will have to override the state form and file by mail.