U.S. STATES — Millions of Americans filing federal tax returns by Wednesday's deadline are expected to claim new income tax deductions for tips and overtime wages for the first time under a tax law enacted by President Donald Trump. Many taxpayers, however, will not receive the same deductions on their state income tax returns because numerous state governments have chosen not to adopt the federal tax breaks.

State governments decide independently whether to match changes in federal tax law. In states that have not conformed to the new federal provisions, workers who claim federal deductions for tips or overtime wages still owe state income taxes on those earnings. In most states, taxpayers file separate federal and state income tax forms, with most states using figures from the federal return as the starting point for their own tax calculations.

A handful of states have moved to mirror the federal breaks. Idaho updated its state law to adopt the deductions for tips and overtime wages. Iowa, Montana, North Dakota and Oregon also offer state income tax breaks on tips, overtime wages and auto loan interest for new vehicles assembled in the United States. Colorado offers state deductions for tips and auto loan interest but opted out of the overtime wage deduction. Eight states — Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas and Wyoming — levy no personal income tax at all.

Arizona presents an unusual case. State income tax forms list deductions for tips, overtime wages, auto loan interest and older residents based on a November executive order from Gov. Katie Hobbs. But Arizona law remains unchanged and does not formally adopt the federal tax breaks. Hobbs vetoed two bills that would have codified the deductions because they included provisions to adopt corporate tax breaks under the Trump tax law, and lawmakers have not passed a third attempt. Arizona could still enact a law officially allowing the deductions, potentially retroactively after the filing deadline.

"It's an extraordinarily unusual situation," said Adam Chodorow, a law professor at Arizona State University who specializes in tax law. "But they are being instructed by the state government to take those deductions," he added.

Other states have encountered their own legislative obstacles. South Carolina extended its deadline for state tax refunds to Oct. 15 to give its Republican-led Legislature time to opt in to the federal deductions, but legislation that passed the state House was defeated in the Senate. In Wisconsin, the Republican-led Legislature passed bills to allow state deductions for tips and overtime wages, but Gov. Tony Evers vetoed them on April 3.

Georgia, Indiana and Michigan have enacted laws allowing state tax deductions for tips and overtime wages, but those provisions take effect for the 2026 tax year and are not available on 2025 returns. Other states could still opt in or out of the deductions for their 2026 tax returns.