Delaware Bonus Depreciation: Decoupled, and the Date Depends on Who You Are.
A 2025 Delaware law decoupled from OBBBA's restored 100% bonus depreciation — but the override starts on a different date for corporations (property placed in service after January 19, 2025) than for individuals (after December 31, 2025). The gap between those two dates is real, and it changes the answer.
Reviewed by Cost Seg Smart Editorial Team · Last verified against 30 Del. C. §1903 — corporate income tax, 30 Del. C. §1106 — personal income tax modifications
The 30-second answer: Delaware decoupled from federal §168(k) bonus depreciation in 2025, specifically in response to OBBBA — but the override applies on a different date for each taxpayer type.
Corporate: the override applies to property placed in service after January 19, 2025 (30 Del. C. §1903(d)(2)) — essentially all OBBBA-eligible corporate property. Individual: the override applies only to property placed in service after December 31, 2025 (§1106(d)). An individual placing property in service in that eleven-month gap still gets full OBBBA bonus on both the federal and Delaware returns.
On a representative Delaware single-family rental (the single-family rental band we publish, 9–32% of depreciable basis reclassified, 16% representative), the reclassified components alone generate an estimated $18K–$165K of federal Year-1 depreciation — roughly $6,660–$61,570 of federal Year-1 tax savings at the 37% top bracket, with the Delaware treatment turning on your placed-in-service date.
Federal vs Delaware, Side by Side
For cost-segregation-reclassified components placed in service AFTER the applicable Delaware override date:
| Tax provision | Federal (IRC) | Delaware |
|---|---|---|
| Bonus depreciation under §168(k) | 100% may apply to qualified property acquired and placed in service after January 19, 2025, subject to §168(k) eligibility, related-party/prior-use, binding-contract, and election rules | Overridden for property after the applicable date — pre-OBBBA depreciation continues instead, through 2030 |
| Corporate override start date | Not applicable | After 2025-01-19 (30 Del. C. §1903(d)(2)) |
| Individual override start date | Not applicable | After 2025-12-31 (§1106(d)) — nearly a year later than corporate |
| Recovery of the overridden amount | Not applicable | Ordinary MACRS over the asset's normal life — deferred, not lost |
| Federal usability of the deduction | Subject to passive activity, at-risk, basis, and business-interest limits | Same federal limits govern the federal deduction; Delaware's override applies independently by date |
Sources: 30 Del. C. §1903 — corporate income tax, 30 Del. C. §1106 — personal income tax modifications, IRC §168(k). Federal bonus figures reflect current law; eligibility depends on acquisition and placed-in-service dates and elections.
Why the two dates matter, and the gap they create
This is brand-new law, enacted in 2025 (85 Del. Laws c. 231), and any conformity summary written before mid-2025 will simply have Delaware wrong. Delaware's general base conformity is rolling — it normally picks up federal changes automatically — but this amendment specifically overrides §70301 of P.L. 119-21 (the OBBBA provision restoring 100% bonus depreciation) and continues pre-OBBBA depreciation for affected property through 2030.
The corporate override, at §1903(d)(2), begins for property placed in service after January 19, 2025 — the same date OBBBA itself made its restored bonus retroactive to. That means essentially all OBBBA-eligible corporate property is already decoupled in Delaware.
The individual override, at §1106(d), begins only for property placed in service after December 31, 2025. The two dates are separated by nearly a year, and the gap is not a drafting quirk to smooth over — it is eleven months during which an individual investor placing property in service gets the full OBBBA bonus on both the federal and Delaware returns, while a corporation placing the identical property in service on the identical date does not.
The pattern is not limited to §168(k) either — the same 2025 amendment reaches §70302 (R&D expensing) and §70307 (qualified production property) with the same decouple-from-this-one-bill structure.
Illustrative numbers: a Delaware single-family rental
Using the single-family residential (SFR) band we publish — 9–32% of depreciable basis reclassified into 5/7/15-year property, 16% representative — on a property priced between $250,000 and $650,000, with a 20% residential land allocation. This example assumes an individual taxpayer BEFORE the 2025-12-31 override date — inside the gap window where Delaware still tracks the full federal bonus:
| Line item | Federal | Delaware (individual, before 2025-12-31) |
|---|---|---|
| Purchase price band | $250,000–$650,000 | Same property |
| Depreciable basis (20% land allocation) | $200,000–$520,000 | Same basis, no override active yet |
| Reclassified to 5/7/15-yr (9–32% of basis) | $18K–$165K | Carried through in full — the individual override has not begun |
| Year-1 treatment | $18K–$165K deducted (100% bonus, if eligible) | Same $18K–$165K — Delaware follows federal until 2025-12-31 |
| If placed in service AFTER 2025-12-31 instead | Unchanged federally | Individual override applies — pre-OBBBA depreciation continues; ordinary MACRS recovery instead |
| Illustrative Year-1 federal tax savings on reclassified components | ~$6,660–$61,570 (37% × $18K–$165K) | Fully realized in this window; date-dependent afterward |
Figures are illustrative and use the site's published SFR reclassification band; your result depends on your basis, land allocation, bracket, component mix, and eligibility. Confirm your exact placed-in-service date and taxpayer type against the two override dates above before relying on either outcome. Whether the full federal deduction is usable in the current year still depends on your passive-loss, at-risk, basis, and business-interest situation.
See a sample cost segregation report
Look at exactly what your Delaware study delivers: the component-by-component 5/7/15-year schedule, the Form 4562-ready numbers, and the documentation your CPA files. Real reports are our best answer to "is this legit?"
Forms your CPA files for a Delaware property
For a Delaware taxpayer, the workflow starts with pinning down the exact placed-in-service date against the applicable override for your entity type:
- Federal Form 4562: depreciation and amortization, including the §168(k) bonus deduction on eligible reclassified components. Flows to Schedule E (rental), Schedule C (active business), or the applicable corporate return.
- Schedule E (or Schedule C): the accelerated federal deduction reduces federal taxable income in Year 1, subject to the federal passive-loss, at-risk, basis, and business-interest limits.
- Delaware return: confirm the placed-in-service date against the corporate (2025-01-19) or individual (2025-12-31) override date before assuming either the full bonus or the pre-OBBBA schedule applies.
- Ordinary MACRS recovery, if the override applies: the disallowed amount is recovered over the asset's normal 5, 7, 15, 27.5, or 39-year life rather than in Year 1.
- Form 3115 §481(a) section: included only if this is a federal lookback method change on a property placed in service in a prior year (see below).
The reclassified schedule is the same engineered output either way; which Delaware rule applies to it depends entirely on the placed-in-service date and the taxpayer type.
Form 3115 lookback on a Delaware property
If the property was placed in service in a prior tax year and depreciation was reported using a non-segregated method, a federal Form 3115 (Application for Change in Accounting Method) may allow a current-year §481(a) catch-up adjustment for the accelerated depreciation you missed, generally without amending prior returns. This is often the single biggest acceleration mechanism in cost segregation. Any catch-up dollars are illustrative and depend on placed-in-service date, prior depreciation claimed, bonus eligibility, land allocation, and component mix.
For Delaware, what governs is the property's original placed-in-service date, not the year the Form 3115 is filed — a catch-up computed in 2027 for property placed in service in 2025-06 (inside the individual gap window) still gets the full pre-override treatment for that property.
See our full Form 3115 cost segregation guide for federal mechanics, partnership and LLC pass-through treatment, and timing rules.
Should you do cost segregation in Delaware? Usually yes — but check the date first.
Delaware's 2025 decoupling changes the timing of the state-side benefit for property after the applicable date; it does not eliminate the federal benefit or the case for the study:
- The full federal Year-1 bonus is intact regardless of the Delaware date. Delaware's override touches only the Delaware return; the federal §168(k) bonus is unaffected. How much you use in the current year still depends on your passive-loss, at-risk, basis, and business-interest situation.
- Check both dates before assuming an answer. Confirm whether your placed-in-service date falls before or after 2025-01-19 (corporate) or 2025-12-31 (individual) — the same property can have a different Delaware answer depending on the entity that owns it.
- Nothing is lost, only deferred, once the override applies. Pre-OBBBA depreciation continues through 2030, recovered through ordinary MACRS over the asset's normal life.
The nuance to flag with your CPA is exact-date sensitivity: because this is brand-new 2025 law, do not rely on a conformity summary written before mid-2025, and confirm the placed-in-service date against the correct override for your taxpayer type before filing.
Frequently asked
Does Delaware allow bonus depreciation?
It depends on your placed-in-service date and your taxpayer type, and the two answers genuinely differ. A 2025 amendment (85 Del. Laws c. 231) decoupled Delaware from OBBBA's restoration of 100% bonus depreciation for property placed in service after certain dates — and those dates are different for individuals and corporations. Before its applicable override date, an individual or corporation gets the full federal §168(k) bonus on the Delaware return the same as on the federal return.
Why do individuals and corporations have different Delaware start dates?
Because the 2025 amendment wrote two separate override provisions. The corporate override (30 Del. C. §1903(d)(2)) begins for property placed in service AFTER January 19, 2025 — which is essentially all OBBBA-eligible corporate property, since that is also OBBBA's own retroactive effective date. The individual override (§1106(d)) begins only for property placed in service AFTER December 31, 2025. The two dates are nearly a year apart, and a page — or a CPA — that gives one Delaware answer for both taxpayer types will be wrong for one of them.
Is there a window where an individual still gets full bonus depreciation in Delaware?
Yes, and it is the single most useful fact on this page. An individual taxpayer placing property in service between January 19, 2025 and December 31, 2025 still gets the full OBBBA 100% federal bonus AND the full Delaware benefit, because the individual override does not begin until property placed in service after 2025-12-31. A corporation placing the same property in service in that same window is already decoupled, because the corporate override began on 2025-01-19.
What happens to the disallowed bonus depreciation in Delaware — is it lost?
No. The statute continues pre-OBBBA depreciation for affected property through 2030 rather than disallowing the deduction outright, and the disallowed amount recovers through ordinary MACRS depreciation over the asset's normal life rather than being lost. This decouple-from-this-one-bill pattern also reaches §70302 (R&D expensing) and §70307 (qualified production property) — it is not limited to §168(k) alone.
Is cost segregation still worth it in Delaware?
Usually yes, and the placed-in-service date and entity type both matter to how much. For property that falls before the applicable override date for your taxpayer type, the full federal bonus flows through to Delaware with no adjustment. For property that falls after it, Delaware continues pre-OBBBA depreciation instead — the deduction is not lost, just recovered on the ordinary MACRS schedule rather than in Year 1. Whether the full federal deduction is usable in the current year still depends on federal passive-activity, at-risk, basis, and business-interest limits regardless of the Delaware date.
Can I use Form 3115 on a Delaware property I bought years ago?
Often, yes, at the federal level. If the property was placed in service in a prior tax year and depreciation was reported using a non-segregated method, a federal Form 3115 (Application for Change in Accounting Method) may allow a current-year §481(a) catch-up for the accelerated depreciation you missed, generally without amending prior returns. Because Delaware's 2025 decoupling applies by placed-in-service date rather than by the year the Form 3115 is filed, the property's original placed-in-service date — not the catch-up year — is what determines whether the Delaware override applies.
Related guides
- Bonus depreciation by state: overview
- All 50 states: conformity reference table
- Maryland bonus depreciation (decoupled, manufacturing carve-out)
- Michigan bonus depreciation (decoupled, differently by entity)
- Pennsylvania bonus depreciation (decoupled)
- Form 3115 cost segregation lookback: §481(a) mechanics
- What is cost segregation: the full primer
- Sample cost segregation reports