Below is a summary of tax provisions taking effect in 2025 across various states.
Alabama
- Overtime pay becomes taxable beginning July 1, 2025.
- Tax credit for donations to eligible rural hospitals (expected to begin in 2026).
Arizona
- Tax law conforms to IRC as of January 1, 2025.
- Tax withholding rate of 2.5% applies to gambling winnings.
Colorado
- Family Affordability Tax Credit: AGI limits set at $85,000 ($96,000 for MFJ).
- Colorado Promise Tuition & Fee Credit: New refundable credit (2025–2032). Available to eligible students attending Colorado post-secondary institutions. Covers first two years of college if family income ≤ $90,000.
- Social Security Benefits Subtraction:
- Age 65+: May subtract full Social Security benefits included in federal taxable income.
- Ages 55–64: Eligible if AGI ≤ $75,000 ($95,000 MFJ).
Connecticut
- Earned Income Tax Credit: Additional $250 for taxpayers with at least one child.
- 10% Business Surtax extended through tax years 2025–2028.
Georgia
- Income tax rate reduced to 5.19%.
- Georgia Surplus Tax Refund: One-time rebate of $250–$500 for taxpayers who paid income taxes in 2023 and 2024.
- Child & Dependent Care Credit: Increased to 50% of the federal credit.
- New Georgia Child Tax Credit: $250 per child under age 6.
- Tax law conforms to IRC as of January 1, 2024.
Hawaii
- Individual tax brackets have been modified
Idaho
- Corporate tax rate reduced to 5.3%.
- Individual tax rate reduced to 5.3%.
- Retirement benefits for retired U.S. military members (and unremarried widows/widowers) may be subtracted from taxable income.
- Corporate/personal taxpayers may add or subtract net capital gains or losses related to precious metal bullion or monetized bullion.
- Tax law conforms to IRC as of January 1, 2025.
Illinois
- Personal exemption set at $2,850.
- Multiple new business credits enacted.
- Illinois EITC increased to 40% of the federal credit.
Indiana
- Flat individual tax rate will now be 3%
Iowa
Kansas
Additional standard deduction:
- $2,320 for Head of Household.
- $2,250 for certain disabled veterans.
Kentucky
- Standard deduction increased to $3,270.
- Tax law conforms to IRC as of December 31, 2024.
Louisiana
- Flat individual tax rate: 3%.
- Standard deduction: $12,500.
- Flat corporate tax rate: 5.5%.
- Bonus Depreciation: 100% deduction allowed in year property is placed in service. Requires addition adjustment in subsequent years.
- Research & Development (R&D) Costs: May be fully deducted in the year incurred, with future addition modification.
Maine
- Tax law conforms to IRC as of December 31, 2024.
- Dependent exemption doubled for each dependent under age 6.
- Phaseout: $20 for each $500 of Maine AGI above $100,000 ($150,000 MFJ).
Maryland
- Gambling winnings:
- ≥ $5,000: 9.5% tax withheld.
- $500–$4,999: Estimated tax payment required within 60 days.
- New higher-income tax brackets introduced.
- 2% Surcharge on net capital gains for AGI > $350,000.
- Standard deduction increased:
- $3,350 (Single).
- $6,700 (MFJ/Head of Household).
- Itemized deductions reduced by 7.5% of excess AGI over $200,000.
Massachusetts
- Adopting single sales apportionment for corporate income tax.
Mississippi
- Flat individual tax rate: 4.4%.
Missouri
- Top marginal rate: 4.7%.
- Full income tax deduction allowed for federal capital gains.
Nebraska
- Top marginal rate: 5.2%.
- Social Security benefits no longer taxable.
- Family Caregiver Tax Credit:
- 50% of eligible expenses.
- Max $2,000 ($3,000 if veteran or dementia diagnosis).
- Requires certification by Nebraska Department of Revenue.
New Hampshire
- Individuals will no longer be taxed on interest and dividend income
New Jersey
- Top individual marginal tax rate remains at 6.2%.
New Mexico
- Flat corporate tax rate: 5.9%.
- Individual brackets expanded to six tiers.
- Advanced Energy Equipment Credit: Lesser of 20% of qualified expenditures or $25 million. Requires pre-approval by the Energy, Minerals & Natural Resources Department.
New York
- Empire State Child Tax Credit:
- $1,000 for children ≤ age 3.
- $330 for children ages 4–16.
- Inflation Refund Credit: $150–$400 depending on filing status and income.
North Carolina
- Flat individual tax rate: 4.25%.
- Standard Deduction:
- $12,750 (Single).
- $25,500 (MFJ).
- $19,125 (Head of Household).
- Standard Deduction:
- Corporate rate: 2.25%.
Ohio
- Top individual rate: 3.125%.
- Tax law conforms to IRC as of March 7, 2025.
- Joint filer credits/exemptions phased out at AGI ≥ $750,000.
- Educator expense deduction raised to $300.
Pennsylvania
- Corporate income tax rate: 7.99%.
Rhode Island
- Standard Deduction (inflation-adjusted):
- $10,900 (Single).
- $21,800 (MFJ).
- $16,350 (Head of Household).
- Personal & dependency exemption: $5,100.
South Carolina
- Tax law conforms to IRC as of December 31, 2024.
- Top marginal individual rate: 6%.
Utah
- Corporate and individual rate reduced to 4.5%.
- Nonrefundable Social Security benefits credit: Income thresholds raised to $54,000 (Single) / $90,000 (MFJ).
Vermont
- Tax law conforms to IRC as of December 31, 2024.
- Child Tax Credit: Now for children ≤ age 6.
- EITC: Taxpayers without children receive 100% of federal EITC.
- Social Security Income Exclusion: Income threshold increased to $55,000 (Single) / $70,000 (MFJ).
- Veteran Tax Credit: Refundable $250 for veterans with AGI ≤ $25,000.
Virginia
- Standard Deduction: $8,750 (Single) / $17,500 (MFJ).
- Refundable portion of EITC = 20% of federal EITC.
- Eligible educator expense deduction eliminated.
West Virginia
- Individual income tax rates: 2.2% – 4.82%.
- Tax law conforms to IRC as of January 1, 2025.
Wisconsin
- Child & Dependent Care Credit: Increased to 100% of federal credit.
- Retirement income exclusion: $24,000 (Single) / $48,000 (MFJ).
- Adjusted income tax brackets:
- Single:
- Up to $14,680: 3.5%
- $14,681–$50,480: 4.4%
- $50,481–$323,290: 5.3%
- Over $323,290: 7.65%
- Married Filing Joint:
- Up to $19,580: 3.5%
- $19,581–$67,300: 4.4%
- $67,301–$431,060: 5.3%
- Over $431,060: 7.65%
- Adoption expense deduction increased to $15,000.
