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What to Know About Trump's Tax Breaks for Tips and Overtime when Filing State Tax Returns
Only about a half-dozen states are mirroring the federal breaks, leaving many workers to claim them on federal returns but still pay state tax.
- As the federal tax-filing deadline approaches on Wednesday, millions of Americans are claiming new deductions for tips and overtime wages under President Donald Trump's tax law, yet many will still owe state taxes on those earnings.
- State income tax systems often do not automatically match federal changes, requiring specific legislation to align laws. Idaho, Iowa, Montana, North Dakota, and Oregon adopted these breaks, while most other states still tax tips and overtime wages.
- Law professor Adam Chodorow of Arizona State University warned that many will claim deductions "who aren't legally entitled to do so," creating an "extraordinarily unusual situation" for taxpayers reconciling conflicting forms.
- Legislative gridlock has stalled relief in Arizona, where Democratic Gov. Katie Hobbs vetoed bills, and South Carolina, where the Senate defeated an opt-in measure, extending that state's tax refund deadline to Oct. 15.
- Other states may still adjust their policies for the 2026 tax year. Oregon is considering legislative changes that would stop offering certain deductions, further complicating the tax landscape for residents.
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26 Articles
26 Articles
The Toronto Star+2 Reposted by 2 other sources
What to know about Trump’s tax breaks for tips and overtime when filing state tax returns
As the tax-filing deadline nears, millions of Americans are expected to claim new federal income tax breaks for tips and overtime wages available for the first time under a wide-ranging
·Toronto, Canada
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Associated Press News+21 Reposted by 21 other sources
What to know about Trump's tax breaks for tips and overtime when filing state tax returns
Millions of Americans are expected to claim new federal tax breaks for tips and overtime wages under a law enacted by President Donald Trump.
·United States
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30 million have taken advantage of Trump’s ‘No Tax on Tips, Overtime’ policies, Treasury Secretary Bessent says
Treasury Secretary Scott Bessent touted the Trump administration’s tax deductions for tipped wages and overtime pay Friday, revealing that nearly 30 million Americans have taken advantage of the new policy.
·New York, United States
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Total News Sources26
Leaning Left10Leaning Right2Center10Last UpdatedBias Distribution46% Left, 45% Center
Bias Distribution
- 46% of the sources lean Left, 45% of the sources are Center
46% Left
L 46%
C 45%
Factuality
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