West Virginia fully conforms to federal §168(k) via rolling IRC conformity. STR investors take the 100% Year-1 bonus depreciation deduction — restored by the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) for property acquired and placed in service after January 19, 2025 — on both federal and West Virginia returns. No add-back, no separate schedule, no state Form 4562 adjustment. See the full 50-state conformity map to compare West Virginia's treatment to every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Compare in the state conformity tool →
How West Virginia Adopts §168(k) — Rolling vs Static Conformity
West Virginia's Personal Income Tax base is defined under W. Va. Code §11-21-9, which begins with federal adjusted gross income and uses rolling IRC conformity for depreciation. Federal IRC amendments — including bonus depreciation restorations, extensions, and phase-outs — apply on the same effective date they apply federally.
When OBBBA restored 100% §168(k) permanently for property acquired and placed in service after January 19, 2025, West Virginia adopted that treatment automatically. Neighboring Virginia, by contrast, uses fixed-date IRC conformity and has excluded §168(k) since 2003; a Virginia STR investor must add back the entire deduction on the state return. Same Appalachian mountain, opposite conformity posture.
For an STR investor in Snowshoe, Canaan Valley, Berkeley Springs, or Harper's Ferry, this means state and federal depreciation schedules stay aligned. No parallel books, no basis divergence to reconcile at sale.
Worked Example — $150K Federal Deduction + Extra State Savings
Take a $1.1M short-term rental in Snowshoe or the Greenbrier Valley with a cost segregation analysis identifying $150,000 in 5-year and 15-year property eligible for §168(k):
- Federal Year-1 deduction: $150,000 × 37% marginal bracket = $55,500 federal tax savings.
- West Virginia Year-1 deduction: Same $150,000 on the state return. At the 4.82% top marginal rate = $7,230 additional state tax savings.
- Total Year-1 tax benefit: $62,730.
Contrast that against Virginia (fixed-date decoupler) at 5.75%: a Virginia investor loses ~$8,625 in Year-1 state savings on the same $150K. That's a ~$15,855 swing in Year-1 cash for two states whose panhandles literally touch each other.
The Statute Explained
The controlling authority is W. Va. Code §11-21-9, which defines West Virginia taxable income by reference to federal AGI with rolling IRC conformity. Because West Virginia has not enacted a §168(k)-specific exclusion, federal bonus depreciation as restored by OBBBA is operative for West Virginia purposes on the same effective date.
OBBBA restored 100% §168(k) bonus depreciation permanently — full first-year expensing for qualified 5-year, 7-year, 15-year, and 20-year property acquired and placed in service after January 19, 2025.
How West Virginia Compares to Decoupled States
West Virginia's full-conformer position looks especially favorable against neighboring decouplers on the Mid-Atlantic:
- California — 100% add-back at 13.3%: ~$19,950 Year-1 miss on a $150K deduction.
- Virginia — 100% add-back at 5.75% via fixed-date conformity: ~$8,625 Year-1 miss.
- Pennsylvania — 100% PIT add-back at 3.07%: ~$4,605 Year-1 miss.
Decoupled-state investors eventually recover their deduction over MACRS life, but they trade Year-1 cash for years of deferred timing. West Virginia removes that friction entirely.
What This Means for Your STR Purchase Decision
Because West Virginia conforms cleanly, deal underwriting is simpler: whatever the federal §168(k) deduction is, the West Virginia state deduction matches it, and the state layer adds up to 4.82% to Year-1 savings.
The size of the deduction is a function of the property. West Virginia's high-country ski markets and Eastern Panhandle STR corridors typically feature modern builds and outdoor amenities that classify as 5-year and 15-year property — the exact mix that maximizes §168(k). To model both federal and West Virginia state Year-1 tax math for a specific listing, run the address on your property before you make an offer.
Analyze a specific West Virginia property
Run any West Virginia STR listing through DepreciMax's $99 property report — line-item finish classification with both federal and West Virginia state Year-1 tax math.
For a side-by-side view of West Virginia against any other state at any federal deduction amount, use the state conformity tool.
Frequently Asked Questions
Does West Virginia conform to federal §168(k) bonus depreciation in 2026?
Yes. West Virginia is a rolling IRC conformity state under W. Va. Code §11-21-9 and fully adopts federal §168(k) as restored by OBBBA (P.L. 119-21) for property acquired and placed in service after January 19, 2025. There is no state add-back and no separate depreciation schedule.
How much extra state tax savings does a West Virginia STR investor get from bonus depreciation?
On a $150,000 federal §168(k) deduction, a West Virginia investor at the 4.82% top marginal rate captures an additional $7,230 in Year-1 state tax savings on top of ~$55,500 in federal savings at the 37% bracket. Total Year-1 tax benefit: about $62,730.
What is the West Virginia statute that governs IRC conformity?
W. Va. Code §11-21-9 defines West Virginia taxable income by reference to federal adjusted gross income with rolling IRC conformity. Federal IRC amendments including OBBBA's restoration of 100% §168(k) bonus depreciation apply automatically for West Virginia purposes.
Does West Virginia require a Form 4562 add-back like decoupled states?
No. West Virginia's IT-140 individual return begins with federal AGI and applies no §168(k) modification. There is no state 4562 variant or addition modification for bonus depreciation.
How does West Virginia compare to a neighboring decoupled state like Virginia?
Virginia has explicitly disallowed §168(k) since 2003 via fixed-date IRC conformity. On a $150,000 deduction, a Virginia investor at 5.75% loses ~$8,625 in Year-1 state savings. West Virginia at 4.82% picks up ~$7,230 in state savings instead. That's a ~$15,855 swing in Year-1 cash between two adjacent states.
Are West Virginia's ongoing rate reductions relevant for §168(k) planning?
West Virginia has enacted phased individual income tax reductions in recent years, and the top marginal rate cited here reflects the 2026 rate schedule. Because West Virginia conforms fully, the state-side value of §168(k) simply scales with whatever the current top rate is — the deduction itself always matches federal.
- West Virginia Tax Division — Individuals: tax.wv.gov/Individuals/
- W. Va. Code §11-21-9 (Personal Income Tax; taxable income; IRC conformity)
- IRS §168(k) — Modified Accelerated Cost Recovery System, additional first-year depreciation
- One Big Beautiful Bill Act of 2025 (P.L. 119-21) — restored 100% §168(k) for property acquired and placed in service after January 19, 2025
Every state's §168(k) position, in one place
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