The first full filing season of the TCJA is done. What do we need to know? TPC’s Howard Gleckman digs out the top three numbers worth remembering. “About 65 percent of households paid less in individual income taxes in 2018 as a result of the TCJA. About 6 percent paid more. The rest paid about the same. And, in general, the more money you made, the bigger your tax cut on average--both in dollars and as a share of your after-tax income.”
Putting more opportunity in Opportunity Zones. Treasury announcedits second tranche of regulations to accompany the Opportunity Zone provisions of the Tax Cuts and Jobs Act. In general, the new guidance gives investors additional flexibility in where they put their money and hold long they must hold investments to receive the most generous tax benefits.
The close of tax season doesn’t mean relief for state budget officers. TPC’s Lucy Dadayan explains that states are still adapting to the Tax Cuts and Jobs Act. That, coupled with economic uncertainties, can create unexpected revenue swings and wreak havoc with state budgets.
New York State tax collections dipped by 4.7 percent in the past fiscal year. New York ended the year on March 31 with total tax receipts of $75.6 billion, after sharp revenue declines in December and January. However, receipts in March exceeded projections by $811.7 million. State Comptroller Thomas DiNapoli said, “With expectations of a slowing economy and ongoing concerns regarding federal fiscal policies, a strong commitment to building robust reserves in preparation for the next economic slump is essential.”
Lining up opposition to Illinois Governor JB Pritzker’s graduated income tax plan. Republican State Representative David McSweeney and representatives from the Illinois Policy Institute, Americans for Prosperity, and Ideas Illinois are trying to convince voters that the state should spend less before taxing more. The groups say Illinois should cut $3 billion from education, pensions and Medicaid instead of raising taxes by $3.4 billion.
Oops: California Franchise Tax Board issued 23,500 unverified refunds. A technology glitch allowed the state to send refunds beforeit could verify that filers had reported tax withholding correctly. The error affected those who filed returns between March 8 and March 11. They may owe more tax or be due a higher refund.
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