New York has decoupled from IRS §168(k) since 2003 (with narrow Liberty Zone/Resurgence Zone exceptions) — STR investors face 100% add-back at up to 10.9%. Cross-reference our all-50-states conformity guide to see how New York lines up against every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Run your own numbers in the Conformity Tool →
New York STR investors keep the full federal IRS §168(k) deduction but must add back 100% on the state return
New York has decoupled from IRS §168(k) since 2003 for both individual and corporate purposes, with narrow exceptions for Resurgence Zone and Liberty Zone property. Individuals report add-back on Form IT-225 using code A-209 and take state depreciation on Form IT-398. On a $150,000 federal bonus deduction, a NY STR investor at 10.9% top rate loses ~$16,350 in Year-1 state savings. NYC adds another 3.876% top rate (via NYC-1127 / IT-201 city tax) — total effective loss ~$22,164 in NYC. The 2026-2027 NY budget also decoupled from OBBBA's §168(n) qualified production property provisions.
The New York 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 New York against any other state at any federal deduction amount.
Analyze a specific New York property
Run any New York STR listing through DepreciMax's $99 property report — line-item finish classification, calibrated to a formal cost seg study, includes New York-specific state impact math.
Frequently asked questions
Does New York conform to federal §168(k) bonus depreciation in 2026?
New York is decoupled from federal §168(k) bonus depreciation. New York has decoupled from IRS §168(k) since 2003 (with narrow Liberty Zone/Resurgence Zone exceptions) — STR investors face 100% add-back at up to 10.9%.
What is the New York bonus depreciation add-back rule?
New York requires a 100% add-back of the federal §168(k) deduction on the New York state return. New York has decoupled from IRS §168(k) since 2003 for both individual and corporate purposes, with narrow exceptions for Resurgence Zone and Liberty Zone property. Individuals report add-back on Form IT-225 using code A-209 and take state depreciation on Form IT-398. On a $150,000 federal bonus deduction, a NY STR investor at 10.9% top rate loses ~$16,350 in Year-1 state savings. NYC adds another 3.876% top rate (via NYC-1127 / IT-201 city tax) — total effective loss ~$22,164 in NYC. The 2026-2027 NY budget also decoupled from OBBBA's §168(n) qualified production property provisions.
How much does New York non-conformity cost a short-term rental investor?
On a $150,000 federal §168(k) deduction with New York's 10.90% top marginal income tax and 100% state add-back, the Year-1 state tax miss is approximately $16,350. 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 New York non-conformity kill the short-term rental loophole?
No. The STR loophole is a federal §469 mechanism. New York'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 New York 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 →