Not sure where to post this, since I didn't see a "taxes" forum, but I'll post it here. The other day I ran across an interesting article on the fallout at the state level from the new tax law passed in late December.
Some states will have to change their tax laws soon, or residents will be hit with higher taxes unexpectedly in 2018. One example is Michigan, where the number of exemptions claimed on the state return is tied to the federal tax return. The federal tax law for 2018 eliminated all personal exemptions at the federal level, and unless Michigan (and some other states) changes its tax laws, residents won't be able to claim any personal exemptions on their Michigan state taxes, resulting in more income subject to tax.
Fortunately, there is "talk" about changing the Michigan state law so state exemptions are no longer "attached" to the federal taxes. Hope that becomes a reality and passes here in Michigan.
Some states, however, might not change their laws and instead enjoy a windfall from residents paying more (unexpectedly) on their 2018 state taxes.
There are other potential impacts of the federal tax law at the state level as well, beyond the issue of personal exemptions being eliminated at the federal level.
In any case, I had not thought about the impact at the state level, and as I was researching a new location for the remainder of my retirement, I came across this article:
New Federal Tax Law: Individual State Conformity Laws Will Impact State Taxable Income - Budget Blogs
One excerpt from the article:
"Other states, including Delaware, Illinois, Indiana, Kansas, Louisiana, Maryland, Michigan, Missouri, Nebraska, New York, Ohio, Oklahoma, Oregon, Rhode Island, West Virginia and Wisconsin, tie the number of personal exemptions to the number of exemptions used in the federal tax return, then apply their own state exemption amount to it. State taxable income will rise in those states unless they elect to modify their state laws to continue having a state personal exemption."
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