State Tax Conformity for Overtime & Tips Deductions
Disclaimer: State tax laws change frequently. This table reflects our best understanding as of October 2026. Always verify with your state's tax authority or a qualified tax professional.
What Is State Conformity?
"Conformity" refers to whether a state follows federal tax law, including new deductions. States handle this differently:
- Rolling conformity: Automatically adopts federal changes
- Fixed-date conformity: Follows federal law as of a specific date (may need legislation to update)
- Selective conformity: Chooses which federal provisions to adopt
- No conformity: Has separate tax rules or no income tax
State-by-State Conformity Table
| State | Status | Notes |
|---|---|---|
| Alabama | Partial/Pending | Uses federal AGI as starting point; likely to conform |
| Alaska | No Income Tax | No state income tax |
| Arizona | Conforms | Rolling conformity to IRC |
| Arkansas | Partial/Pending | Selective conformity; legislation pending |
| California | Does Not | Does not conform; add back deduction |
| Colorado | Conforms | Uses federal taxable income |
| Connecticut | Partial/Pending | Uses federal AGI; may conform |
| Delaware | Conforms | Rolling conformity |
| Florida | No Income Tax | No state income tax |
| Georgia | Partial/Pending | Legislation pending |
| Hawaii | Does Not | Does not conform to new IRC provisions |
| Idaho | Conforms | Rolling conformity |
| Illinois | Conforms | Uses federal AGI |
| Indiana | Conforms | Rolling conformity |
| Iowa | Conforms | Rolling conformity |
| Kansas | Conforms | Uses federal AGI |
| Kentucky | Conforms | Rolling conformity |
| Louisiana | Partial/Pending | Uses federal AGI with modifications |
| Maine | Conforms | Rolling conformity |
| Maryland | Conforms | Uses federal AGI |
| Massachusetts | Does Not | Does not conform; separate state rules |
| Michigan | Conforms | Uses federal AGI |
| Minnesota | Partial/Pending | Selective conformity; pending |
| Mississippi | Partial/Pending | Uses federal AGI with modifications |
| Missouri | Conforms | Uses federal AGI |
| Montana | Conforms | Rolling conformity |
| Nebraska | Conforms | Uses federal AGI |
| Nevada | No Income Tax | No state income tax |
| New Hampshire | No Income Tax | Only taxes interest/dividends (phasing out) |
| New Jersey | Does Not | Does not conform; separate gross income |
| New Mexico | Conforms | Uses federal AGI |
| New York | Does Not | Does not conform; add back required |
| North Carolina | Partial/Pending | Selective conformity; pending |
| North Dakota | Conforms | Uses federal taxable income |
| Ohio | Conforms | Uses federal AGI |
| Oklahoma | Conforms | Uses federal AGI |
| Oregon | Conforms | Rolling conformity |
| Pennsylvania | Does Not | Separate state income classes |
| Rhode Island | Conforms | Uses federal AGI |
| South Carolina | Conforms | Uses federal taxable income |
| South Dakota | No Income Tax | No state income tax |
| Tennessee | No Income Tax | No state income tax |
| Texas | No Income Tax | No state income tax |
| Utah | Conforms | Uses federal AGI |
| Vermont | Conforms | Uses federal AGI |
| Virginia | Partial/Pending | Fixed-date conformity; legislation needed |
| Washington | No Income Tax | No state income tax |
| West Virginia | Conforms | Uses federal AGI |
| Wisconsin | Partial/Pending | Selective conformity |
| Wyoming | No Income Tax | No state income tax |
| District of Columbia | Conforms | Uses federal AGI |
What If My State Doesn't Conform?
If your state does not follow the federal overtime/tips deduction, you'll need to "add back" the deduction on your state return:
- Calculate your federal AGI including the deduction
- On your state return, add back the overtime/tips deduction amount
- This increases your state taxable income
- You'll owe state tax on the added-back amount
Example: California Resident
You claim a $10,000 overtime deduction on your federal return. California does not conform, so on your CA-540:
- Federal AGI: $80,000 (after deduction)
- California addition: +$10,000
- California AGI: $90,000
- Additional CA tax at ~9.3%: approximately $930
States With No Income Tax
The following states have no personal income tax, so conformity is not relevant:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
New Hampshire only taxes interest and dividends (not wages), and this tax is being phased out through 2027.
Check Your State
For the most current information, consult your state's Department of Revenue or tax authority: