Massachusetts has explicitly disallowed IRS §168(k) for PIT purposes since 2002 (TIR 02-11, 03-25) — full add-back with recovery over the property's normal life. Compare Massachusetts's treatment to every other US jurisdiction in the complete state-by-state conformity map.
Modeled on a $150,000 federal §168(k) deduction. Run your own numbers in the Conformity Tool →
Massachusetts STR investors keep the full federal IRS §168(k) deduction but must add back 100% on the state return
Massachusetts requires a 100% add-back of IRS §168(k) bonus depreciation for both PIT and corporate excise purposes. Massachusetts DOES allow the §179 expense election (unlike bonus). The 4% millionaires' surtax on income >$1M means high-income STR investors face an effective 9% top rate. On a $150,000 federal bonus deduction, a Massachusetts STR investor at 9% loses ~$13,500 in Year-1 state savings. Basis is adjusted for state purposes so disposition gain/loss is recalculated on the MA return.
The Massachusetts statute and DOR authority
The bigger picture: §168(k) is one lever in a broader accelerated-depreciation strategy. See our accelerated depreciation explained guide for how MACRS, §168(k), and §179 stack for a real estate investor.
How this compares nationally
Of the 50 US states plus DC, 25 conform fully to federal §168(k), 2 (Minnesota and North Carolina) are partial conformers, and 24 are decoupled. See the full comparison in the 50-state conformity hub, or use the interactive Conformity Tool to compare Massachusetts against any other state at any federal deduction amount.
Analyze a specific Massachusetts property
Run any Massachusetts STR listing through DepreciMax's $99 property report — line-item finish classification, calibrated to a formal cost seg study, includes Massachusetts-specific state impact math.
Frequently asked questions
Does Massachusetts conform to federal §168(k) bonus depreciation in 2026?
Massachusetts is decoupled from federal §168(k) bonus depreciation. Massachusetts has explicitly disallowed IRS §168(k) for PIT purposes since 2002 (TIR 02-11, 03-25) — full add-back with recovery over the property's normal life.
What is the Massachusetts bonus depreciation add-back rule?
Massachusetts requires a 100% add-back of the federal §168(k) deduction on the Massachusetts state return. Massachusetts requires a 100% add-back of IRS §168(k) bonus depreciation for both PIT and corporate excise purposes. Massachusetts DOES allow the §179 expense election (unlike bonus). The 4% millionaires' surtax on income >$1M means high-income STR investors face an effective 9% top rate. On a $150,000 federal bonus deduction, a Massachusetts STR investor at 9% loses ~$13,500 in Year-1 state savings. Basis is adjusted for state purposes so disposition gain/loss is recalculated on the MA return.
How much does Massachusetts non-conformity cost a short-term rental investor?
On a $150,000 federal §168(k) deduction with Massachusetts's 9.00% top marginal income tax and 100% state add-back, the Year-1 state tax miss is approximately $13,500. The federal Year-1 deduction of $150,000 is unaffected, producing ~$55,500 in federal Year-1 savings at the 37% federal bracket regardless of state.
Does Massachusetts non-conformity kill the short-term rental loophole?
No. The STR loophole is a federal §469 mechanism. Massachusetts's add-back rule only changes state-level Year-1 timing. The federal deduction and the federal STR loophole benefit are unaffected — an investor in Massachusetts still captures the full federal Year-1 bonus depreciation deduction and can still offset W-2 income at the federal level.
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
See the 50-state map →