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Index/Topics/State and Local Income Taxes

State and Local Income Taxes

State and local income taxes may continue to apply to overtime and tips, with conformity decisions varying by state.

Fact-Checks

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Jan 18, 2026
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Will everyone be eligible for no tax on overtime filing taxes this year?

No — the "no tax on overtime" provision is not universal; it applies only to qualifying overtime compensation for workers who meet FLSA non‑exempt status and income limits, is capped and temporary, an...

Jan 21, 2026

How will the qualified overtime deduction interact with Social Security/Medicare tax calculations and state tax reporting?

The new “” deduction created by the 2025 law changes treatment only — it reduces taxable income on the employee’s federal return when claimed, but it does not change : and withholding remain unchanged...