Tax Blog - Page 6

Tips Deduction for Restaurant Workers: Servers and Bartenders in 2026

How the OBBBA tips deduction works for restaurant servers and bartenders, with worked pay scenarios.

Why Gig Workers on 1099 Cannot Claim the Tips Deduction

IRC Section 224 requires W-2 employment. Independent contractors on 1099 are excluded.

Does California Tax Tips in 2026? Waiting for the FTB

California has not conformed to the OBBBA tips or overtime deductions. What CA workers need to know.

Does New York Tax Tips in 2026? What We Know So Far

New York has not conformed to the OBBBA tips deduction. Here is what NY tipped workers need to know.

Wisconsin, Michigan, Indiana: OBBBA Conformity Resolved

Michigan and Indiana now confirm OBBBA tips and overtime deductions. Wisconsin's governor vetoed conformity bills. Updated September 2026.

Does Maryland Tax Tips in 2026? The Decoupling Answer

Maryland selectively decouples from federal provisions, plus county taxes add another layer.

Does Pennsylvania Tax Tips in 2026? The Class-of-Income Answer

Pennsylvania's eight-class income system means the OBBBA tips deduction cannot reduce PA tax.

Does Minnesota Tax Tips in 2026? The M1 Addback

Minnesota uses its own gross income and a fixed conformity date, requiring an M1 addback for OBBBA deductions.

Does North Carolina Tax Tips in 2026? The Flow-Through Answer

North Carolina conforms via structural flow-through, confirmed by NCDOR Important Notice.

Does Kentucky Tax Tips in 2026? The Fixed-Date Cutoff

Kentucky's IRC conformity is fixed at 12/31/2024, before the OBBBA was enacted.

Does Alabama Tax Overtime in 2026? The Expired Exemption

Alabama's own overtime exemption expired June 30, 2025, and the federal OBBBA deduction doesn't flow through.

Does Massachusetts Tax Tips in 2026? The Draft TIR Answer

Massachusetts has a fixed IRC conformity date of 1/1/2024, and a draft TIR confirms non-conformity.

Does Ohio Tax Tips in 2026? Rolling Conformity and the Flat Tax

Ohio's rolling IRC conformity means OBBBA deductions automatically reduce state tax at the 2.75% flat rate.

Does New Jersey Tax Tips in 2026? The Gross Income Answer

New Jersey defines gross income independently, so OBBBA deductions don't flow through to NJ.

Does Georgia Tax Tips in 2026? The $1,750 Cap

Georgia passed its own tips/overtime exclusion, but capped it at $1,750 combined vs the federal $25,000.

Four States, Four Ways to Conform: CO, AZ, IA, MT and OBBBA

Colorado, Arizona, Iowa, and Montana all honor OBBBA deductions through four different mechanisms.

SALT Cap Phase-Down: Five Worked Scenarios for 2026

Five scenarios showing how the SALT cap phases down from $40,400 to the $10,000 floor.

Does Illinois Tax Tips in 2026? The Schedule M Addback

Illinois requires OBBBA deductions to be added back on Schedule M, meaning workers lose the state benefit.

Senior Bonus Deduction and Social Security: How They Interact

The $6,000 senior bonus reduces AGI, which can lower the taxable portion of Social Security benefits.

No Income Tax States and the Tips/Overtime Deduction: The Easy Answer

Workers in the nine no-income-tax states get the simplest deal: full federal savings with no state tax to worry about.

W-2 Transition Year: How IRS Notice 2025-69 Affects Your 2025 Filing

For TY 2025, W-2 Codes TP and TT were optional. How to claim OBBBA deductions without them.

Married Filing Separately and OBBBA: Why MFS Filers Are Excluded

MFS filers cannot claim the tips, overtime, or senior bonus deductions. Here is why and what they can do.

The OBBBA Phase-Out: How MAGI Reduces All Four Deductions

Side-by-side comparison of all four MAGI phase-outs: tips, overtime, senior bonus, and SALT cap.

Schedule 1-A Walkthrough: Claiming Tips, Overtime, and the Senior Deduction

Step-by-step instructions for filling out the new Schedule 1-A, from W-2 codes to Form 1040.