How do state conformity rules work and which states use rolling federal conformity versus static conformity for individual income tax?
Executive summary
When federal tax law changes, states must decide whether to adopt those changes for their own income tax bases — a process called conformity — and they do so either by automatically following the current Internal Revenue Code (rolling conformity) or by referencing the IRC as of a fixed date (static conformity) or by choosing specific provisions (selective conformity) [1]. As of recent analyses, eighteen states employ static conformity, some states explicitly set a reference date in statute or regulation, and other states require legislative action to pick up federal changes — forcing a patchwork of approaches that can shift revenue and compliance burdens [2] [3] [4].
1. What "conformity" means and why it matters
Conformity describes how a state’s individual income tax base is defined by reference to federal rules — states typically "start with" federal definitions (like AGI or federal taxable income) and then add or subtract items where they choose to decouple, so most state individual income tax expenditures actually mirror federal ones unless the state expressly rejects them [1]. That linkage means congressional changes can ripple into state revenues and taxpayer calculations unless the state has made a deliberate statutory choice to block or delay that spillover [1].
2. The difference between rolling, static and selective conformity
Rolling (or dynamic) conformity means a state’s code automatically tracks changes to the Internal Revenue Code as they occur, so federal changes will flow through immediately into the state base; static conformity fixes the state to the IRC as of a specific date (for example, “IRC as of Dec. 31, 2024”), meaning later federal amendments do not apply until the state updates its reference point; selective conformity accepts specific federal changes and rejects others [1] [3]. Tax Foundation analysis characterizes states into these categories because the decision mechanism determines whether major federal acts instantly affect state budgets or require separate state action to implement [2].
3. Which states use rolling vs. static conformity — what is known from reporting
National tax researchers report that eighteen states have static conformity, one is "truly selective," and the remainder use rolling or other approaches, but public summaries do not enumerate all states in the snippets provided here [2]. Several states explicitly set a reference date in statute or administrative guidance: for example, Illinois’ enacted definition of the IRC for tax years after Dec. 31, 2024 uses that fixed-date approach [3], while other states — such as North Carolina — start individual calculations from federal AGI but must enact legislation to update their reference to later versions of the IRC and had not done so as of early January 2026 [4]. The available sources establish the existence and scale of static conformity but do not provide a full, sourced roster of which states roll forward automatically versus which hold to a static date in every case [2] [3] [4].
4. What drives states to choose one approach over another
States weigh competing priorities: automatic (rolling) conformity simplifies taxpayer compliance and preserves alignment with federal tax policy, but it can produce substantial revenue losses when Congress enacts generous deductions or credits; static or selective conformity preserves revenue predictability and gives lawmakers control, at the cost of more frequent legislative or administrative updates and greater compliance complexity for taxpayers and employers [5] [2]. Policymaking incentives and fiscal politics matter: states facing revenue pressure or seeking to avoid passing the costs of federal generosity will tend to decouple or adopt static dates, while those prioritizing administrative simplicity or rapid uptake of federal benefits may lean toward rolling conformity [5] [2].
5. Practical implications for taxpayers and policymakers
For taxpayers, the conformity regime affects whether a federal change (for example, a new deduction or adjusted wage base) immediately alters state taxable income, withholding tables, and estimated-payment calculations or whether those changes are delayed until the state acts — a source of confusion for employers and filers that has prompted myriad state withholding updates and policy bulletins entering the 2026 filing season [6] [7]. For policymakers, the choice between revenue certainty and administrative simplicity remains politically charged: the recent federal "One Big Beautiful Bill" produced a wave of state deliberations and differing responses precisely because states are split between automatic pass-throughs of federal law and statutory lock-ins that blunt federal effects [2] [5].