Thanks itonewbie.  I think Indiana wants to keep it a relatively easy adjustment, just a different depreciation method for State (as in Book, Federal and State depreciation methods).  For some reason ProSeries appears to be taking the Indiana instructions to the extreme:  "Figure the net income (or loss) that would have been included in federal adjusted gross income had the bonus depreciation method not been used."   And assuming this recalculated AGI would include a recalculated PAL.  So you would end up with a Federal PAL and a State PAL.