Retirement income is taxed by three sets of rules at once: the federal formula for Social Security, the withdrawal rules for IRAs and 401(k)s, and each state’s own exclusions. These pieces compare them.
· 6 min read
The federal return excludes a 2026 health savings account contribution of up to $4,400 for self-only coverage. California and New Jersey do not: a $65,000 single filer who contributes the maximum is still taxed by either state on all $65,000, whether the money went through payroll or not, and California taxes the account's earnings every year as well.
· 13 min read
For the 2026 tax year, eight states tax some Social Security benefits: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. Pension and IRA rules spread wider, from Illinois, which subtracts every retirement dollar at any age, to California, which taxes all of it.
· 5 min read
Box 1 of a W-2 leaves out a 401(k) or 403(b) deferral. Pennsylvania keeps both in box 16, New Jersey keeps the 403(b), and Ohio cities keep both in box 18, so a $65,000 earner deferring $5,000 can see $60,000 federally and $65,000 for the state.
· 7 min read
Before December 31, 2026, an extra $5,000 of 401(k) deferral cuts the $65,000 single filer's federal tax by $600 and the $185,000 filer's by $1,200; harvesting $18,000 of losses saves the second filer $2,970. Pennsylvania taxes the deferral anyway; Illinois does not.
· 5 min read
Taxpayers 65 and older deduct an extra $6,000 each through 2028, stacked on the standard deduction and the age-65 addition: for 2026 the layers total $24,150 for a single filer and $47,500 for a couple who are both 65. Each $6,000 shrinks by six cents per dollar of modified AGI over $75,000 ($150,000 joint) and is gone at $175,000 ($250,000 joint).
· 6 min read
Section 530A builds the Trump Account as a traditional IRA for children: a one-time $1,000 Treasury deposit for children born 2025 through 2028, after-tax contributions capped at $5,000 a year, and ordinary income tax on the earnings at withdrawal. Growth is tax-deferred, and the widely reported 'tax-free' label is wrong.
· 6 min read
Illinois's overhaul of apportionment and foreign-income deductions lives on corporate schedules; the IL-1040 still charges a flat 4.95%, unchanged since July 2017 and constitutionally required to stay non-graduated. What moves an Illinois bill is the exemption allowance ($2,925 for 2026, gone in one step above $250,000 of AGI), the retirement subtraction, and the 5% property tax credit.