New car depereciation very different on form 3885a for California State tax vs federal tax

[gsdtax]

I bought a new car and on my federal tax the depreciable amount was over $12,000 however on form 3885A the California depreciation deduction is just ~900 $ with an adjustment upwards to my income of of over 11,500 (the difference between the federal and state depreciation amount)

I can't find out the reason why? How is the ~$900 in (f) on 3885A calculated and why is it so much lower than federal?

[MaryK4]

Just to clarify, did you take bonus or section 179 depreciation? @gsdtax

[gsdtax]

@MaryK4 i think it was section 179? Turbo tax said based on the info your vehicle qualifies for a section 179 deduction and the special depreciation allowance and then I clicked I’ll take the special depreciation allowance. 

what’s the difference and how do I check?

[gsdtax]

@MaryK4 actually just checked that i took the special depreciation allowance not the section 179

[MaryK4]

California does not conform to the federal modifications to depreciation limitations on luxury automobiles (IRC Section 280F). 

The depreciation caps for a luxury SUV, truck or van placed in service in 2021 is $18,200 for the first year with bonus depreciation.  The California limit is much lower- $3,304.

In some cases, it is beneficial to use the mileage deduction for both federal and California.

@gsdtax

[gsdtax]

Thank you!!