2026

  • Connecticut

    • Family Child Care Home Tax Credit created: Licensed family child care home owners may claim a refundable $500 credit per qualifying home for tax years beginning on or after January 1, 2026.

    • Farm Investment Tax Credit created: Eligible farmers may claim a refundable credit equal to 20% of qualifying investments in machinery, equipment, and buildings beginning with tax year 2026.

    • Non-electronic school supplies sales-tax exemption introduced: Qualifying school supplies purchased for nonbusiness purposes became exempt from Connecticut sales and use tax for sales occurring on or after July 1, 2026.

    • Cannabis tax calculation changed: Beginning October 1, 2026, Connecticut will replace its THC-content-based cannabis tax with a flat tax equal to 10.75% of gross receipts from cannabis sales.

    Maine

    • High-income tax surcharge introduced: Beginning with tax year 2026, Maine imposes an additional 2% income-tax surcharge on Maine taxable income exceeding $1 million for single filers, $750,000 for married filing separately, and $1.5 million for joint filers, heads of household, and qualifying surviving spouses.

    • $300 affordability payments authorized: Eligible full-year Maine residents who file a 2025 Maine return by October 15, 2026 may receive a one-time $300 payment. Income limits are below $50,000 for single or married filing separately, $75,000 for heads of household, and $100,000 for joint filers or qualifying surviving spouses.

    • Property Tax Fairness Credit increased: For tax year 2026, the maximum credit for eligible taxpayers under age 65 increased to $1,500. The maximum for taxpayers age 65 or older remains $2,000.

    • Pass-through entity tax created: Partnerships, S corporations, and certain other pass-through entities may elect to pay Maine tax at the entity level beginning in 2026. The tax is calculated using Maine’s highest individual rate, currently 7.15%, and qualifying owners generally receive a refundable credit equal to 90% of their share of the entity-level tax paid.

    Massachusetts

    • Millionaires surtax threshold increased: The threshold for Massachusetts’s additional 4% surtax rose to $1,107,750 for tax year 2026. Only taxable income above the indexed threshold is subject to the additional tax.

    • Massachusetts continues to disallow several new federal deductions: Taxpayers may qualify federally for deductions involving qualified tips, qualified overtime, and qualifying vehicle-loan interest, but Massachusetts does not allow those deductions when calculating state taxable income. State additions may therefore be required even when the deduction appears on the federal return.

    • High-value real-estate sale withholding remains newly relevant: Certain Massachusetts real-estate sales of $1 million or more are subject to state withholding, generally calculated at 4% of the gross sales price for individual sellers.

    New Hampshire

    • Interest and Dividends Tax remains fully repealed: New Hampshire continued to impose no state tax on interest and dividend income for tax periods beginning after December 31, 2024.

    • Business-tax filing thresholds remain higher: The Business Profits Tax filing threshold generally applies when gross business income exceeds $109,000, while the Business Enterprise Tax filing threshold generally applies when gross receipts or the enterprise-value tax base exceeds $298,000.

    • One-time tax amnesty: Eligible taxpayers could resolve certain outstanding New Hampshire tax liabilities through February 15, 2026, with penalties waived and only part of the accrued interest due.

    Rhode Island

    • Whole-home short-term rental tax introduced: Beginning January 1, 2026, rentals of an entire home for 30 days or fewer became subject to a new 5% whole-home rental tax, in addition to the state’s 7% sales tax and the applicable local hotel tax.

    • Non-owner-occupied property tax created: Effective July 1, 2026, Rhode Island imposed a new tax on certain residential properties assessed above $1 million that are not owner-occupied. The rate is $2.50 per $500 of assessed value above $1 million, subject to statutory exemptions.

    Vermont

    • Qualified Small Business Stock treatment changed: Beginning with tax year 2026, Vermont does not allow the new federal exclusion for gains from qualified small business stock under IRC §1202. However, qualifying gains may still be eligible for Vermont’s existing capital-gains exclusion. This means a gain excluded on the federal return may require a Vermont adjustment.

    • S-corporation credit restriction removed: Vermont repealed a provision that had prevented certain S corporations from receiving a credit for qualifying taxes paid to another state. This is potentially relevant to pas-through businesses operating or paying tax in multiple jurisdictions.

  • New Jersey

    • Gas and diesel taxes increased: Effective January 1, 2026, New Jersey’s combined tax rate increased to 49.1 cents per gallon for gasoline and 56.1 cents per gallon for diesel fuel.

    • Property-tax relief programs expanded and consolidated: New Jersey continues using the combined PAS-1 application for Senior Freeze, ANCHOR, and Stay NJ. For the 2026 application cycle, the Senior Freeze income limit increased to $172, 475 for 2025 income.

    • Stay NJ benefits become a major relief feature: The program began providing quarterly property tax-relief payments to qualifying older homeowners, with benefits subject to income and program limits. Later 2026 legislation adjusted future maximum benefits to as much as $6,500 annually for qualifying households with income $100,000 or less.

    • Hotel occupancy surcharge introduced: Certain hotel stays in qualifying cities are now subject to an additional $3-per-day surcharge beginning January 1, 2026.

    New York

    • Empire State Child Credit increased for older children: For tax years 2026 and 2027, eligible taxpayers may claim up to $1,000 for each qualifying child under age four and up to $500 for each qualifying child ages four through 16.

    • Metropolitan Commuter Transportation Mobility Tax changed for self-employed taxpayers: Beginning in 2026, self-employed individuals with more than $150,000 of net earnings attributable to the Metropolitan Commuter Transportation District are subject to rates of 0.60% in Zone 1 and 0.34% in Zone 2.

    • Geothermal Energy System Credit became refundable for some taxpayers: Beginning with tax year 2026, qualifying taxpayers who meet certain income requirements may elect to receive unused portions of the credit as a refund. The credit limit had previously increased from $5,000 to $10,000 for qualifying systems placed in service on or after July 1, 2025.

    • S-corporation estimated-tax requirement changed: Beginning in 2026, the estimated-tax threshold for corporations subject to Article 9-A increased from $1,000 to $5,000. As a result, New York S corporations are no longer required to make estimated payments when their expected tax does not exceed the new threshold.

    Pennsylvania

    • Estimated-tax payment threshold increased: For 2026, Pennsylvania increased the income threshold used to determine when individuals must make estimated personal income-tax payments from $11,000 to $14,000.

    • Working Pennsylvanians Tax Credit remains available: Eligible taxpayers who qualify for the federal Earned Income Tax Credit may claim a refundable Pennsylvania credit equal to 10% of the federal EITC, up to $805.

  • Florida

    • Hunting, Fishing, and Camping Sales Tax Holiday created: Qualifying hunting, fishing, and camping supplies are exempt from Florida sales tax from September 1 through December 31, 2026.

    • Home-hardening product exemption established by refund: Purchasers of qualifying impact-resistant doors, garage doors, and windows installed on eligible residential property may request a refund of sales tax paid on purchases made from July 1, 2026, through June 30, 2029.

    • Certain small propane tanks permanently exempted: Florida created a permanent sales-tax exemption for propane tanks with a capacity of 20 pounds or less, effective in 2026.

    • Certain gold and silver coins became sales-tax exempt: Beginning July 1, 2026, Florida introduced a sales-and-use-tax exemption for qualifying gold and silver coins.

    • Annual Back-to-School Sales Tax Holiday dates changed: The permanent holiday now runs from July 20 through August 20 each year. For 2026, qualifying purchases include clothing priced at $100 or less, school supplies at $50 or less, learning aids at $30 or less, and eligible personal computers and accessories priced at $1,500 or less.

    Georgia

    • Standard deduction increased substantially: The deduction rose to $15,000 for single filers, heads of household, and married taxpayers filing separately, and $30,000 for married couples filing jointly.

    • Limited exclusions created for tips and overtime: Georgia did not fully conform to the new federal exclusions, but taxpayers may exclude up to $1,750 of qualified tips and $1,750 of qualified overtime compensation when calculating Georgia taxable income.

    • Certain farmer assistance payments excluded: Qualifying payments received through the Farmer Bridge Assistance Program and Assistance for Specialty Crop Farmers Program may be excluded from Georgia taxable income, subject to applicable requirements.

    • One-time surplus tax refunds authorized: Eligible taxpayers who filed both their 2024 and 2025 Georgia returns could receive up to $250 for single or married-filing-separately taxpayers, $375 for heads of household, and $500 for married couples filing jointly.

    • Employer childcare tax credit created: Employers paying qualifying childcare expenses for employees became eligible for a credit of $500 per child, increased to $1,000 for the first year. This may be relevant to small and pass-through business owners even though it is claimed at the employer level.

    North Carolina

    • S-corporation loss and basis treatment clarified: Beginning with tax year 2026, North Carolina requires an S-corporation shareholder to add back losses or deductions included in federal adjusted gross income to the extent they exceed the shareholder’s combined basis in the corporation’s stock and debt. This aligns the state treatment more closely with federal basis limitations and is relevant to S-corporation owners claiming pass-through losses.

    • Mecklenburg County sales tax increased: Effective July 1, 2026, Mecklenburg County added a 1% local-sales-and-use-tax, increasing the combined general rate from 7.25% to8.25%. This is a local rather than statewide change, but it is relevant for Charlotte-area consumers and businesses.

    South Carolina

    • Federal deductions replaced with a new state deduction: South Carolina no longer uses the federal standard or itemized deduction in calculating state income tax. The state now begins with federal adjusted gross income and allows a new South Carolina Income Adjusted Deduction (SCIAD) of up to $15,000 for single or married-filing-separately taxpayers, $22,500 for heads of household, and $30,000 for joint filers and qualifying surviving spouses. The deduction phases down at higher income levels.

    • Pregnancy Resource Tax Credit introduced: Taxpayers making approved cash contributions to qualifying organizations supporting maternal and child care, adoption, or victims of human trafficking may claim a new nonrefundable credit. The credit cannot exceed 50% of the taxpayer’s total tax liability, and unused amounts may be carried forward for five years.

    • Williamsburg County sales tax increased: A new 1% Capital Projects Tax raised the combined sales-tax rate from 7% to 8% beginning May 1, 2026.

    Virginia

    • Virginia tax interest rates changed during 2026: The rate applied to Virginia tax underpayments and non-corporate overpayments was 9% for the first quarter of 2026 and declined to 8% for the second quarter. This is administrative rather than an income-tax provision, but it is relevant for taxpayers with balances due, amended returns, or estimated-tax underpayments.

  • Alabama

    • Overtime premium deduction introduced: For calendar years 2026 through 2028, taxpayers may deduct the premium portion of qualifying overtime compensation from Alabama income. The deduction is limited to the lesser of the actual overtime premium or $1,000 per taxpayer and is available whether or not the taxpayer itemizes. Only the premium above the employee’s regular rate qualifies, not the full overtime payment.

    • Thirty-day nonresident employee safe harbor took effect: Beginning January 1, 2026, certain nonresident employees working in Alabama for 30 days or less during the calendar year may be exempt from Alabama income tax and filing requirements.

    Kentucky

    • Individual income-tax rate reduced: Kentucky’s flat individual income-tax rate decreased from 4% to 3.5% for tax year 2026.

    • Tax interest rate decreased: Kentucky reduced its base tax-interest rate to 7% for 2026. This is relevant to taxpayers with unpaid balances or estimated-tax underpayments, bit it administrative rather than an income-tax change.

    Louisiana

    • Mobile workforce exemption expanded: Qualifying nonresident employees may work in Louisiana for up to 30 days without owing Louisiana income tax on those wages, subject to statutory requirements.

    • Electronic filing and payment requirements expanded: Additional withholding and sales-tax returns and payments became subject to mandatory electronic submission beginning January 1, 2026.

    • Inventory tax credit treatment changed: Beginning July 1, 2026, qualifying inventory tax credits remain available against individual income tax, including credits flowing through from pass-through entities.

    Mississippi

    • Gaming-withholding threshold increased: Effective January 1, 2026, Mississippi increased the slot-machine winnings threshold subject to state withholding from $1,200 to $2,000. The withholding rate remains 3%.

    Tennessee

    • Family-Owned Non-Corporate Entity exemption expanded: Effective July 1, 2026, Tennessee broadened the family-ownership requirement for the FONCE exemption to include entities at least 95% owned by relatives as distant as first cousins, qualifying family trusts or estates of deceased qualifying relatives. This may be relevant to family-owned LLCs, partnerships, and other non-corporate entities subject to Tennessee’s franchise and excise tax.

    • Local grocery-tax reductions authorized: Metropolitan county governments were authorized to reduce or eliminate their local sales-tax rate on food and food ingredients for tax periods beginning on or after October 1, 2026. This does not automatically change the rate statewide; the applicable metropolitan government must adopt the reduction.

  • Illinois

    • State grocery tax eliminated: Illinois repealed its statewide 1% sales tax on qualifying groceries effective January 1, 2026.

    • Qualified Small Business Stock treatment: For tax years ending on or after December 31, 2026, Illinois decoupled from the federal IRC §1202 exclusion. Individuals, partnerships, trusts, and estates must add federally excluded QSBS gains back when calculating Illinois income.

    • Pass-through entity tax election expanded: Electing partnerships may now choose between two methods for calculating the Illinois PTE tax base, including a method based on full distributive shares of resident partners plus Illinois-source income of nonresidents.

    Indiana

    • Tax Amnesty 2026 offered: Eligible taxpayers could resolve certain past-due Indiana tax liabilities from July 15 through September 9, 2026, with qualifying penalties, interest, and collection fees waived.

    Michigan

    • Retirement and pension deduction fully restored: After a four-year phase-in, Michigan restored the pre-2012 retirement and pension subtraction beginning in tax year 2026. This can substantially reduce Michigan taxable income for qualifying retirees.

    • Social Security and standard deduction interaction changed: For tax years 2026 through 2028, taxpayers born after 1952 who are age 67 or older may claim both the Michigan standard deduction and the Social Security deduction.

    • Motor-fuel tax increased substantially: Michigan’s tax on gasoline, diesel, and alternative fuel rose from 31 cents to 52.4 cents per gallon beginning January 1, 2026.

    • Wholesale marijuana tax introduced: Michigan imposed a new 24% tax on certain wholesale sales and transfers of adult-use marijuana beginning January 1, 2026.

    Ohio

    • Individual income-tax rate flattened and reduced: Beginning in 2026, Ohio replaced its two-bracket structure with a single 2.75% rate on nonbusiness income above $26,050. Ohio’s separate 3%rate on taxable business income remains in place.

    • Personal-exemption income limit reduced: Beginning in 2026, Ohio personal exemptions are unavailable when modified adjusted gross income reaches $500,000 or more.

    Wisconsin

    • National Guard and Reserve pay subtraction created: Beginning with tax year 2026, qualifying members may subtract certain federally paid National Guard and Reserve compensation from Wisconsin’s taxable income when that income is already excluded under another Wisconsin provision.

    • Stillborn Child Tax Credit created: Eligible full-year Wisconsin residents who experience a stillbirth during 2026 may claim a nonrefundable credit. The credit limited to $2,000 for married couples filing jointly or $1,000 per eligible parent, and a fetal death report must accompany the return.

  • Iowa

    • Estimated-tax payment threshold increased: Individuals must make Iowa estimated payments only when they expect to owe $1,000 or more in tax not covered by withholding.

    Kansas

    • Employer Child Care Credit: Effective July 1, 2026, the employer child care credit increased to 75% of qualifying child care expenses. Annual credits are capped at $100,000 per taxpayer, with a 3-year carryover for unused credits.

    Minnesota

    • Pass-Through Entity (PTE) Tax: The PTE tax election was extended through tax year 2027, retroactive to January 1, 2026, allowing eligible partnerships and S corporations to continue paying tax at the entity level.

    • Property Tax Refund: A one-time 14.88% increase to the 2025 Homestead Credit Refund was enacted in 2026, providing an average refund increase of about $212 per eligible homeowner.

    Missouri

    • Federal Income Tax Deduction: Effective January 1, 2026, Missouri eliminated the state deduction for federal income taxes paid.

    Nebraska

    • Individual Income Tax: Effective January 1, 2026, Nebraska’s top individual income tax rate decreased from 5.20% to 4.55%.

    North Dakota

    • Flat Individual Income Tax: Effective January 1, 2026, North Dakota replaced its graduated individual income tax rate with a flat 2.50% tax rate for individuals, estates, and trusts.

    • Primary Residence Tax Credit: Beginning with tax year 2026, eligible homeowners may claim a refundable primary residence tax credit of up to $1,600 for qualifying property taxes paid on their principal residence.

    • Child Care Tax Credit: Effective January 1, 2026, North Dakota created a new individual income tax credit for qualifying child care expenses to help offset the cost of care for eligible taxpayers.

    South Dakota

    • Homeowner Property Tax Relief Fund: Effective July 1, 2026, South Dakota established a Homeowner Property Tax Reduction Fund, dedicating state sales tax revenue to reduce owner-occupied residential property taxes.

  • Arizona

    • Individual Income Tax: Effective January 1, 2026, Arizona reduced its flat individual income tax rate to 2.47%, with the small business, estate, and trust income tax rates also reduced to 2.47%.

    New Mexico

    • Gross Receipts Tax (GRT): Effective July 1, 2026, New Mexico eliminated the gross receipts tax on feminine hygiene products and diapers, reducing the cost of these essential items statewide.

    • Property Tax Exemption: Beginning with the 2026 tax year, the maximum head-of-family property tax exemption increased from $2,000 to $4,000 of taxable value for qualifying homeowners.

    Oklahoma

    • Individual Income Tax: Effective tax year 2026, Oklahoma reduced the top individual income tax rate to 4.5% and simplified the tax brackets from six to four.

    Texas

    • General Residence Homestead Exemption: Effective tax year 2026, the mandatory school district homestead exemption increased from $100,000 to $140,000 of appraised value for qualifying homeowners.

    • Senior & Disabled Homestead Exemption: Effective tax year 2026, the additional school district homestead exemption for homeowners age 65 or older or disabled increased from $10,000 to $60,000, resulting in a total school district homestead exemption of up to $200,000 for qualifying homeowners.

    • Business Personal Property Exemption: Effective January 1, 2026, the exemption for business personal property increased from $2,500 to $125,000 of appraised value, significantly reducing property taxes for many small businesses.

  • Colorado

    • TABOR Refunds: Tax year 2026 is expected to be the first year since 2020 without a TABOR refund, as state revenue is projected to remain below the constitutional spending limit.

    Idaho

    • Property Tax Reduction: Beginning with the 2026 tax year, Idaho created an additional homestead property tax credit equal to 10% of a homeowner’s property tax bill, up to $300. The legislation also established new stackable credits of $150 for qualifying fixed-income seniors, $125 for blind or disabled homeowners, and $250 for disabled veterans.

    Montana

    • Residential Property Tax Reform: Effective tax year 2026, Montana implemented a new tiered residential property tax system for primary residences and long-term rentals. Primary residences are taxed at 0.76% on the first $378,000 of market value, 0.90% on the next $378,000, 1.10% on the next tier, while non-primary residences and short-term rentals are taxed at a flat 1.9%.

    Nevada

    • Modified Business Tax (MBT): Effective January 1, 2026, the general employer MBT rate decreased to 1.17% on quarterly taxable wages exceeding $50,000.

    • No Individual Income Tax: Nevada continues to impose no state individual income tax, with state tax revenue relying primarily on sales taxes, the Commerce tax, and the Modified Business Tax.

    Utah

    • Social Security Tax Credit: Beginning with tax year 2026, the income phaseout for the Social Security tax credit increased to $90,000 for married couples filing jointly, allowing more retirees to qualify. Eligible seniors may receive up to $4,545 in annual state income tax relief.

    Wyoming

    • Long-term Homeowner Property Tax Exemption: Effective tax year 2026, the exemption for qualifying long-term homeowners increased to 75% of the first $200,000 of a primary residence’s fair market value. The application deadline was also extended.

    • Veterans Property Tax Exemption: Beginning in 2026, the veterans property tax exemption doubled, providing approximately $400 in annual property tax relief (or up to $180 towards vehicle registration) for eligible veterans.

  • Alaska

    • Permanent Fund Dividend (PFD): Eligible residents receive a 2026 Permanent Fund Dividend of $1,000, continuing Alaska’s annual distribution of oil revenue to qualifying residents.

    • No Individual Income Tax: Alaska continues to impose no state individual income tax, meaning wages, retirement income, and capital gains remain free from state income tax.

    • No Statewide Sales Tax: Alaska remains the only state without both a state individual income tax and a statewide sales tax, although local governments may impose local sales tax.

    California

    • Installment Agreements: Beginning in 2026, individuals with qualifying Franchise Tax Board liabilities may enter installment agreements with repayment terms of up to 84 months, expanded from the previous 60-month maximum.

    • Pass-Through Entity (PTE) Tax Election: California extended the elective PTE tax through tax years 2026-2030, allowing eligible partnerships, LLCs taxed as partnerships, and S corporations to continue using the SALT cap workaround.

    Hawaii

    • Millionaire Income Tax: Effective tax year 2026, Hawaii created a new 13% individual income tax bracket for taxable income exceeding $1 million.

    Oregon

    • Pass-Through Entity (PTE) Tax: Oregon extended the electivePass-Through Business Alternative Income Tax (PTE-E) through tax year 2027, allowing eligible pass-through entities to continue utilizing the federal SALT deduction workaround.

    • Federal Tax Conformity: Beginning with tax year 2026, Oregon partially decoupled from selected post-2025 federal tax provisions to preserve an estimated $291 million in state revenue. As a result, Oregon does not conform to several new federal deductions, including deductions for qualified tips and qualified overtime pay.

    Washington

    • Capital Gain Tax Prepayments: Effective June 11, 2026, taxpayers owing Washington’s capital gains tax may prepay their tax liability up to six months before the filing deadline, providing additional payment flexibility.

    • Millionaire Income Tax: In 2026, Washington enacted a 9.9% tax on adjusted gross income exceeding $1 million per household. However, the tax does not take effect until January 1, 2028 and is subject to legal challenges.

    • Child Tax Credit: Beginning with tax year 2026, D.C. created a $1,000 refundable Child Tax Credit for each qualifying child under age 18. The credit is available to taxpayers with income up to$75,000 (single) or $90,000 (joint).

    • Federal Tax Decoupling: During 2026, the District enacted legislation to decouple from several post-2025 federal tax provisions. This means that D.C. taxpayers cannot claim certain new federal deductions, including deductions for qualified tips and qualified overtime pay, on their D.C. return.

  • American Samoa

    • No Major Tax Legislation: American Samoa did not enact any significant individual or pass-through tax law changes during 2026.

    • Mirror Tax System: American Samoa continues to administer its own income tax system based primarily on the U.S. Internal Revenue Code.

    • Federal Conformity: New federal provisions do not automatically apply in American Samoa unless adopted by territorial law.

    Guam

    • Mirror Tax System: Guam continues to administer its own income tax system using the U.S. Internal Revenue Code, with bona fide residents filing with the Guam Department of Revenue and Taxation instead of the IRS.

    • Business Privilege Tax (BPT): Effective October 1, 2026, Guam reduced its Business Privilege Tax rate to 4% on gross receipts.

    Northern Mariana Islands

    • Mirror Tax System: Bona fide residents file income tax returns with the CNMI Division of Revenue and Taxation under the mirror code rather than with the IRS for CNMI-source income.

    • Construction Tax Update: Effective March 27, 2026, the CNMI enacted Public Law 24-30, amending the 3% construction tax on gross revenues from certain non-residential construction projects and establishing new applicability rules.

    Puerto Rico

    • Individual Income Tax: Effective tax year 2026, Puerto Rico enacted its first comprehensive individual income tax reform in more than 15 years, reducing rates and expanding the 0% tax bracket to the first $12,500 of taxable income.

    • Act 60 Resident Investor Program: Enacted in March 2026, Act 38-2026 extended the Resident Investor Program through December 31, 2055. For new applications submitted on or after January 1, 2027, the preferential tax rate on qualifying interest, dividends, and post-relocation capital gains changes from 0% to 4%. Existing decree holders remain grandfathered under prior rules.

    • Self-Employment Optional Tax: Beginning with tax year 2026, eligible self-employed individuals with gross income of $100,000 or less may elect an optional tax equal to 92% of their otherwise computed income tax, while those with income above $100,000 may qualify for a 95% computation under the optional regime.

    U.S. Virgin Islands

    • Mirror Tax System: Bona fide USVI residents file their income tax returns with the Virgin Islands Bureau of Internal Revenue (VIBIR) rather than the IRS, and federal tax law applies through the territory’s mirror code unless modified by local law.

    • Tax Amnesty Program: Effective March 2026, the USVI enacted a 33-business-day tax amnesty, waiving penalties and interest on delinquent income taxes, property taxes, and gross receipts taxes to assist taxpayers recovering from recent natural disasters.