Do I need to amend my Massachusetts return because of the 2025 depreciation changes?
Massachusetts recently passed a law that changes how certain business depreciation and equipment expenses are calculated on your state return for tax year 2025. These changes are retroactive to January 1, 2025. Most taxpayers aren't affected.
What changed?
The federal One Big Beautiful Bill expanded certain business deductions, but Massachusetts chose not to follow two of those changes:
100% first-year depreciation for qualified production property. Massachusetts doesn't allow this federal deduction for 2025 or 2026.
Higher limits for business equipment expenses. Massachusetts kept the lower limit at $1,250,000 in expenses (decreased from the federal $2,500,000) and kept the threshold at $3,130,000 (decreased from the federal $4,000,000).
TurboTax has been updated to apply the correct Massachusetts amounts automatically.
Am I affected?
You may be affected if you have business activity—such as self-employment, rental, or farm income, or income from a partnership or S corporation—and you claimed either of the deductions listed above on your federal return.
What should I do next?
If you’re affected and you filed your return, you’ll need to amend your return by September 10, 2026 to avoid additional penalties and interest..
If you’re affected and you haven’t yet filed your return, you can file as normal.
