Kansas Bonus Depreciation: Rolling Conformity, No Add-Back.
Kansas conforms to federal §168(k) bonus depreciation by rolling reference. Neither the individual nor the corporate modification list contains a bonus-depreciation add-back — verified by reading both lists directly, not by inferring from the conformity date alone.
Reviewed by Cost Seg Smart Editorial Team · Last verified against K.S.A. 79-32,109 — federal internal revenue code definition, K.S.A. 79-32,117 — individual modifications
The 30-second answer: Kansas conforms to federal §168(k) bonus depreciation by rolling reference. The individual additions list (K.S.A. 79-32,117) and the corporate additions list (K.S.A. 79-32,138) were both read directly, and neither contains a bonus-depreciation add-back.
Why that verification method matters: a rolling-reference definition of the Internal Revenue Code does not by itself guarantee a specific provision flows through — a state can still carve §168(k) out in its separate modifications list. The evidence here is the absence of a bonus-depreciation entry in the OPERATIVE lists, not silence in the definitions section.
On a representative Kansas 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 Year-1 tax savings at the 37% top bracket, flowing through unchanged to the Kansas return.
Federal vs Kansas, Side by Side
For an individual investor's or Kansas business's cost-segregation-reclassified components:
| Tax provision | Federal (IRC) | Kansas |
|---|---|---|
| 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 | Flows through. No add-back on the individual list (K.S.A. 79-32,117) or the corporate list (79-32,138) |
| Conformity mechanism | Not applicable | Rolling reference to the federal Internal Revenue Code (K.S.A. 79-32,109) |
| Individual vs corporate | Same §168(k) rules for both | Corporate list cross-references the individual list — treatment is uniform |
| Verification method | Not applicable | Both modification lists read directly, not inferred from the conformity date alone |
| Federal usability of the deduction | Subject to passive activity, at-risk, basis, and business-interest limits | Same federal limits govern the federal deduction; Kansas adds no state-level reduction |
Sources: K.S.A. 79-32,109, K.S.A. 79-32,117, IRC §168(k). Federal bonus figures reflect current law; eligibility depends on acquisition and placed-in-service dates and elections.
Why we read the modification lists, not just the conformity date
A state's Internal Revenue Code definition and its actual tax treatment of a specific provision are two different questions, and conflating them is a common source of error in this kind of research. K.S.A. 79-32,109 defines "Internal Revenue Code" by rolling reference — Kansas tracks the federal Code as it changes. That alone does not prove Kansas allows every federal provision unmodified: a state can roll forward its general Code reference and still list a specific carve-out (like a §168(k) add-back) in a separate section.
So this verdict rests on reading the actual OPERATIVE modification lists: K.S.A. 79-32,117, which lists every addition an individual Kansas taxpayer must make to federal taxable income, and K.S.A. 79-32,138, the parallel corporate list. Neither contains a bonus-depreciation item. That absence — in the list that would contain it if it existed — is the evidence, not the silence of the definitions section, which would not necessarily show a carve-out even if one existed elsewhere.
The practical result for a Kansas property owner: cost-segregation-reclassified components get the same federal §168(k) bonus on the Kansas return, with no add-back to track and no multi-year subtraction schedule to manage.
Illustrative numbers: a Kansas 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, and 100% federal bonus depreciation for eligible components under current law:
| Line item | Federal | Kansas |
|---|---|---|
| Purchase price band | $250,000–$650,000 | Same property |
| Depreciable basis (20% land allocation) | $200,000–$520,000 | Same basis |
| Reclassified to 5/7/15-yr (9–32% of basis) | $18K–$165K | Same reclassification, same components |
| Year-1 treatment | $18K–$165K deducted (100% bonus, if eligible) | Same $18K–$165K deducted — no Kansas add-back |
| Marginal tax rate | Up to 37% | Kansas individual income tax rate (verify current year with the Kansas Department of Revenue) |
| Illustrative Year-1 federal tax savings on reclassified components | ~$6,660–$61,570 (37% × $18K–$165K) | Same deduction reduces Kansas taxable income, no add-back |
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. 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 Kansas 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 Kansas property
For a Kansas investor or business, the depreciation workflow follows the federal figure directly, with no separate state schedule to track:
- Federal Form 4562: depreciation and amortization, including the §168(k) bonus deduction on eligible reclassified components. Flows to Schedule E (rental) or Schedule C (active business).
- 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.
- Kansas income tax return: Kansas taxable income starts from federal taxable income with the additions at K.S.A. 79-32,117 (or 79-32,138 for corporations) — neither includes a §168(k) item.
- 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 for both books; Kansas simply follows the federal number with no modification for §168(k).
Form 3115 lookback on a Kansas 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.
The federal §481(a) catch-up is the primary lever, and it remains subject to the federal passive-loss, at-risk, and basis limits. For Kansas, the catch-up flows through unchanged since neither modification list carries a bonus-depreciation add-back.
See our full Form 3115 cost segregation guide for federal mechanics, partnership and LLC pass-through treatment, and timing rules.
Should you skip cost segregation in Kansas? No.
Kansas's rolling conformity means the full federal benefit reaches the Kansas return with no adjustment. The math favors doing the study, for three reasons:
- The full federal Year-1 bonus flows through. Neither Kansas modification list adds back §168(k), so the same deduction reduces both federal and Kansas taxable income. How much you use in the current year still depends on your passive-loss, at-risk, basis, and business-interest situation.
- The Form 3115 lookback still captures missed federal years. If the property was placed in service in a prior year and depreciated without cost segregation, the federal §481(a) catch-up may be available, generally without amending prior returns.
- There is no state-level schedule to manage. No add-back, no subtraction cycle, no manufacturing carve-out — one reclassified schedule serves both returns.
The nuance worth remembering is methodological rather than substantive: this conclusion was verified by reading the operative addition lists, not by assuming a rolling conformity date guarantees full pass-through — a distinction that would matter if Kansas ever amended those lists.
Frequently asked
Does Kansas allow bonus depreciation?
Yes. Kansas conforms to the Internal Revenue Code by rolling reference, and neither the individual modification list (K.S.A. 79-32,117) nor the corporate modification list (K.S.A. 79-32,138) contains a §168(k) add-back. An individual or business claims the full federal Year-1 bonus (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), and it flows through to the Kansas return unchanged.
How was Kansas's conformity actually verified, and why does that matter?
By reading both operative modification lists directly, rather than inferring the answer from the conformity date alone. A state can define the Internal Revenue Code by rolling reference in one section and still carve out a specific provision like §168(k) in its separate additions-and-subtractions list. Kansas's rolling reference to the federal Code lives at K.S.A. 79-32,109; the actual additions Kansas taxpayers must make live at 79-32,117 (individual) and 79-32,138 (corporate). Checking that neither list contains a bonus-depreciation item is the evidence that Kansas conforms in substance, not just in the definitions section.
Is Kansas's rolling conformity different from Idaho's fixed-date conformity?
Yes, and the distinction matters for how durable today's answer is. Kansas's reference to the Internal Revenue Code updates automatically as the federal Code changes — rolling conformity — so a future federal depreciation change does not require the Kansas legislature to take any action to flow through, unless a future session adds a specific carve-out to the modification lists. That is a different (and generally more durable) mechanism than a state whose conformity date must be manually re-set each session.
Does Kansas treat individuals and corporations the same way?
Yes. The corporate additions list at K.S.A. 79-32,138 cross-references the individual list at 79-32,117, so the two are structurally tied together — whatever is or is not on the individual list applies to corporations the same way. Neither list carries a §168(k) item.
Is cost segregation still worth it in Kansas?
Yes. Kansas's rolling conformity means a cost-segregation-reclassified component gets the same accelerated federal deduction on both the federal and Kansas returns, with no add-back to track. Whether the full federal deduction is usable in the current year still depends on federal passive-activity, at-risk, basis, and business-interest limits.
Can I use Form 3115 on a Kansas 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. Any catch-up dollars are illustrative and depend on placed-in-service date, prior depreciation, bonus eligibility, land allocation, and component mix. Because Kansas conforms by rolling reference with no §168(k) add-back on either modification list, the federal catch-up flows through to the Kansas return unchanged.