No. of Recommendations: 3
The main reason being that many States base their income tax calculation on Federal Taxable Income ( MAGI, I know for certain Michigan does ).
Just a little nit picking since this is my area of professional expertise.
Federal Taxable Income is NOT the same as MAGI (Modified Adjusted Gross Income). They are very different items. Taxable Income is pretty clearly defined, while MAGI does not have a single definition, but has multiple definitions depending on the circumstances and the specific reason you are making modifications to AGI.
As to state taxes, you are right on the money noting that most states will start with some number from the Federal return (often AGI or Taxable Income) and then adjust that for state purposes, adding and subtracting various items where state tax law does not match up with the federal.
My home state, CA, starts with Federal AGI, then makes various adjustments up and down for the myriad of things that CA taxes differently. They then do a similar exercise with itemized deductions - starting with the Federal itemized and tweaking from there.
Also for those filing in CA, the state does not automatically conform to Federal law changes. They have selected a date as of which they conform to Federal law, then adjust from there, picking and choosing which new laws (or portions of law) they will conform to or partially conform to. (Grammarians may now have a field day with that sentence. It's got some bad grammar and I know it and I'm too lazy to change it.) So CA will not conform to this new deduction for seniors unless they specifically agree to it. That helps with this mad scramble to non-conformity that other states may need to engage it.
Definitely keep an eye on your state legislature to see what parts of this recent federal law your state will choose to include and exclude from their tax laws.
--Peter
