Wisconsin Bonus Depreciation: Frozen at 2014, 2025 Isn't On the List Yet.
Wisconsin freezes depreciation at the IRC as it stood on January 1, 2014, then adopts specific later federal provisions by name — a hand-picked list, not a rolling date. That list stops at 2021. OBBBA's 2025 restoration of 100% bonus depreciation is not named in it.
Reviewed by Cost Seg Smart Editorial Team · Last verified against Wis. Stat. §71.98(3) — depreciation conformity freeze
The 30-second answer: Wisconsin depreciation is frozen at the IRC in effect January 1, 2014 (Wis. Stat. §71.98(3)), with specific later federal provisions imported by name — not a rolling date.
The named-provision list stops at the 2021 Consolidated Appropriations Act. OBBBA's 2025 restoration of 100% federal bonus depreciation is not on that list as currently codified. Unless Wisconsin amends §71.98(3) to add it, Wisconsin does not automatically follow current federal bonus.
On a representative Wisconsin 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, which Wisconsin's frozen list does not currently match at the state level.
Federal vs Wisconsin, Side by Side
For an individual investor's or Wisconsin corporation's cost-segregation-reclassified components:
| Tax provision | Federal (IRC) | Wisconsin |
|---|---|---|
| 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 | Not currently adopted. The named-provision list at §71.98(3) stops at the 2021 Consolidated Appropriations Act |
| Conformity mechanism | Not applicable | Frozen base year (2014-01-01) plus a hand-picked list of later sections adopted by name — not a rolling date |
| Who this applies to | Not applicable | Individuals and corporations alike — §71.98 applies chapter-wide, no split |
| Will this change automatically over time? | Not applicable | No. Requires an affirmative legislative amendment naming the new provision |
| Federal usability of the deduction | Subject to passive activity, at-risk, basis, and business-interest limits | Same federal limits govern the federal deduction; Wisconsin's frozen list applies independently |
Source: Wis. Stat. §71.98(3) — depreciation conformity freeze (current through 2025 Wis. Act 247); IRC §168(k). Federal bonus figures reflect current law; eligibility depends on acquisition and placed-in-service dates and elections.
Why Wisconsin isn't a "conforms, verify current year" state
Most conforming states in this series work the same simple way: a rolling reference date that picks up new federal law automatically, or a fixed date the legislature re-sets each session. Wisconsin's mechanism is structurally different, and treating it like either of those would produce a wrong answer.
Wis. Stat. §71.98(3) freezes Wisconsin depreciation — including §167 and §168 — at the Internal Revenue Code as it stood on January 1, 2014. It then separately lists specific later federal provisions that Wisconsin has chosen to adopt anyway, each one added to the statute by name in a later legislative session. This is a hand-picked exceptions list, not a moving conformity date.
The live question is what that list currently contains, and it must not be answered by assumption. As codified through 2025 Wisconsin Act 247, the enumerated later provisions stop at the 2021 Consolidated Appropriations Act. OBBBA — the 2025 law that restored 100% federal bonus depreciation — is not named anywhere in §71.98(3) as it currently reads. Do not write, and do not assume, that Wisconsin auto-conforms to the current federal bonus regime. Unless and until the Wisconsin legislature amends §71.98(3) to name the OBBBA provision, it simply is not adopted for Wisconsin purposes.
One correction worth flagging for anyone cross-checking this: the working statute URL is /document/statutes/71.98 — the older /statutes/statutes/71/... path pattern 404s, and §71.05 (sometimes cited for this) contains no depreciation language at all.
Illustrative numbers: a Wisconsin 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 | Wisconsin |
|---|---|---|
| Purchase price band | $250,000–$650,000 | Same property |
| Depreciable basis (20% land allocation) | $200,000–$520,000 | Same basis; depreciated under the frozen 2014-01-01 Code |
| Reclassified to 5/7/15-yr (9–32% of basis) | $18K–$165K | Not currently matched — 2025 bonus not on the named list |
| Year-1 treatment | $18K–$165K deducted (100% bonus, if eligible) | Ordinary Year-1 depreciation under the frozen Code and its named exceptions only |
| Later-year treatment | Not applicable (already deducted) | Reclassified basis recovered over the remaining ordinary MACRS life |
| Marginal tax rate | Up to 37% | Wisconsin individual income tax rate (verify current year with the Wisconsin Department of Revenue) |
| Illustrative Year-1 federal tax savings on reclassified components | ~$6,660–$61,570 (37% × $18K–$165K) | No comparable current state-level bonus; recovered over the ordinary schedule instead |
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 the current text of §71.98(3) with your CPA before filing — this is an enumerated list that can change with each legislative session, unlike a rolling-conformity state.
See a sample cost segregation report
Look at exactly what your Wisconsin 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 Wisconsin property
For a Wisconsin taxpayer, the workflow requires checking the enumerated list before assuming any state-level bonus applies:
- 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.
- Wisconsin return: confirm the current text of §71.98(3) — as of the last verification here, the named-provision list stops at the 2021 Consolidated Appropriations Act and does not include OBBBA.
- Ordinary depreciation under the frozen 2014-01-01 Code: absent a specific enumerated exception, Wisconsin depreciation for the reclassified components runs on this basis, recovered over the ordinary MACRS life.
- 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; whether any Wisconsin bonus applies to it depends entirely on whether the relevant federal provision has been added to the named list.
Form 3115 lookback on a Wisconsin 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 Wisconsin, the same named-list mechanism governs the catch-up's state-side treatment: check whether the specific federal provision and placed-in-service period involved are named in §71.98(3) before assuming a Wisconsin bonus figure applies to the catch-up amount.
See our full Form 3115 cost segregation guide for federal mechanics, partnership and LLC pass-through treatment, and timing rules.
Should you still do cost segregation in Wisconsin? Usually yes.
Wisconsin's frozen-list mechanism reduces the current state-level bonus benefit relative to a fully conforming state — but the federal benefit and the value of correct reclassification still hold:
- The full federal Year-1 bonus is unaffected. Wisconsin's list applies only to the Wisconsin return; the federal §168(k) bonus is claimed in full. How much you use in the current year still depends on your passive-loss, at-risk, basis, and business-interest situation.
- Don't assume a future date fixes this automatically. Unlike a rolling or annually-updated fixed-date state, Wisconsin's list only changes when the legislature affirmatively names a new provision — check the CURRENT statute, not a memory of an earlier year's answer.
- Reclassification still accelerates ordinary MACRS. Even without a matching Wisconsin bonus figure, correctly sorting components into 5-, 7-, and 15-year property still front-loads Wisconsin depreciation relative to treating the whole building as 27.5- or 39-year real property.
The nuance to flag with your CPA is to re-check §71.98(3) at filing time, every year — this is a live list, and an amendment naming OBBBA (or a later federal provision) would change the Wisconsin answer without changing anything on the federal side.
Frequently asked
Does Wisconsin allow bonus depreciation?
Only what a specific, named list of federal provisions picks up — and that list does not currently reach 2025's restored 100% bonus. Wisconsin freezes depreciation at the Internal Revenue Code as it stood on January 1, 2014 (Wis. Stat. §71.98(3)), then separately imports certain later federal depreciation-related provisions BY NAME. Bonus depreciation follows only what that enumerated list actually adopts — it is not a rolling conformity mechanism, so a federal change does not flow through automatically.
Does the enumerated list include the 2025 OBBBA restoration of 100% bonus depreciation?
No, and this is the live question a Wisconsin taxpayer needs answered before assuming anything. As currently codified (current through 2025 Wisconsin Act 247), the named provisions in §71.98(3) stop at the 2021 Consolidated Appropriations Act. The One Big Beautiful Bill Act's 2025 restoration of 100% federal bonus depreciation is not named in that list. Do not write, or assume, that Wisconsin automatically follows the current federal bonus depreciation regime — unless Wisconsin amends §71.98(3) to add it, it does not.
Is Wisconsin's mechanism the same as a rolling-conformity state that just happens to lag?
No, and the distinction matters for how you check the answer going forward. A rolling-conformity state picks up federal changes automatically as of a moving date; a state like West Virginia lags only until its date is rolled forward. Wisconsin's mechanism is a frozen base year (2014-01-01) plus a hand-picked list of exceptions added by name, one at a time, by the legislature. There is no future date at which OBBBA-era bonus depreciation will automatically appear — it requires an affirmative amendment naming it, the same way each earlier exception was added.
Does this freeze apply differently to individuals and corporations in Wisconsin?
No. Wis. Stat. §71.98 applies chapter-wide, so an individual and a corporation both compute Wisconsin depreciation under the same frozen 2014-01-01 IRC baseline plus the same enumerated list of later sections — there is no taxpayer-type split to track here.
Is cost segregation still worth it in Wisconsin?
Yes, for the federal benefit, and the reclassification itself still has state-level value. The full federal §168(k) 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) is claimed in full on the federal return regardless of Wisconsin's list. On the Wisconsin return, absent a specific named exception covering your property's placed-in-service date, the reclassified components are instead depreciated under the frozen 2014-01-01 Code — which still means correctly sorting components into 5-, 7-, and 15-year property accelerates Wisconsin depreciation relative to treating the whole building as 27.5- or 39-year real property, just without a state-level bonus figure to match the federal one. 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 Wisconsin 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. On the Wisconsin side, the same named-list mechanism governs the catch-up: check whether the property's placed-in-service date and the relevant federal provision are covered by an enumerated exception in §71.98(3) before assuming a Wisconsin bonus applies.
Related guides
- Bonus depreciation by state: overview
- All 50 states: conformity reference table
- Michigan bonus depreciation (decoupled, differently by entity)
- Kentucky bonus depreciation (permanent, total disallowance)
- Indiana bonus depreciation (decoupled since 2002)
- Form 3115 cost segregation lookback: §481(a) mechanics
- What is cost segregation: the full primer
- Sample cost segregation reports