States and the Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act (TCJA) made substantial changes to the federal tax code. The effect of these changes will differ across the states, depending on each state’s economic, fiscal, and demographic characteristics. For example, although the TCJA will give most taxpayers a tax cut in 2018, residents of North Dakota and Texas will see a larger average reduction than residents of California and New York because of how the TCJA treats high earners, specifically those affected by the new cap on the state and local tax (SALT) deduction.

Further, because states link their state income taxes to federal rules, states must decide whether to let the TCJA changes flow through to their state income tax systems or decouple and establish new rules. These choices will have big effects on both state tax revenue and state taxes paid by their residents. Will states change their own tax systems in response to the TCJA?

The Urban-Brookings Tax Policy Center has new research, estimates, and IRS statistics related to both issues for all 50 states and the District of Columbia—for governments and taxpayers.

 

Research 

Estimates

Model estimates on how the TCJA will affect New York, Texas, and Virginia from “The Effect of The TCJA Individual Income Tax Provisions Across Income Groups and Across the States".

IRS Data

Internal Revenue Service federal tax data reported by state relevant to the TCJA.

Last updatedApril 12, 2018