What is a State income tax?
A state income tax is a tax levied by individual states on income earned by residents and, in some cases, nonresidents earning income within the state. Forty-one states and the District of Columbia impose some form of income tax, using either flat rates or progressive brackets. State income tax payments may qualify as itemized deductions on federal returns, subject to the SALT cap of $40,000 for most filers through 2029. Taxpayers can review their state obligations using State Tax Deadlines and explore strategies through Tax loss harvesting to reduce taxable income at both levels.
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