JEFFERSON CITY, Mo. (AP) — A pressing decision awaits lawmakers in states across the U.S. as they reconvene for their legislative sessions: should they adopt federal tax breaks that could greatly benefit workers who earn tips? The Trump administration is encouraging states to implement these tax cuts, which include deductions for tips, overtime wages, and more. However, the impact on state revenues is causing hesitation. Only a few states have embraced these breaks, while others express skepticism. Major decisions are expected soon as states rush to update tax forms before the filing season begins.
States Debate Federal Tax Breaks: Tips at Risk
States Debate Federal Tax Breaks: Tips at Risk
As lawmakers gear up for new legislative sessions, states across the U.S. face a critical decision: to adopt or reject federal tax breaks proposed by the Trump administration, including deductions for tips and overtime wages.
With the new legislative session approaching, states must decide whether to conform to federal tax changes, which could provide significant financial relief to workers earning tips and overtime. However, many states are skeptical of adopting these breaks due to budget concerns and the impact on local revenues. Only a few states have opted in so far, while others consider the long-term effects of such decisions on their economies.
