Author Topic: Deferred income at the state level?  (Read 1882 times)

oinkette

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Deferred income at the state level?
« on: December 16, 2014, 02:16:35 PM »
I've only ever worked in states with no state income tax (yay!). However, I'm now looking at job options in other states and most of them do have state (and local!) income tax. I know that the federal government looks at contributions to 401k (and HSA, etc.) as deferred income and contributing to them lowers your tax base, but do states (specifically New York city) and local governments as well?  Does it depend on the state?

MustachianAccountant

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Re: Deferred income at the state level?
« Reply #1 on: December 16, 2014, 02:18:23 PM »
It depends on the state.

johnny847

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Re: Deferred income at the state level?
« Reply #2 on: December 16, 2014, 02:33:23 PM »
Yup depends on the state. Some states don't recognize HSAs. NJ does this weird thing of reversing the tax sequence on traditional IRA contributions - tax the contribution and don't tax the withdrawal.

For a quick check, look at the tax forms. Many states will start off with your federal AGI. But read the instructions to see if they add back certain things such as HSA contributions or what not.

dragoncar

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Re: Deferred income at the state level?
« Reply #3 on: December 16, 2014, 02:37:09 PM »
Yes it depends but most states follow fed rules in general.  CA doesn't recognize hsa either

brooklynguy

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Re: Deferred income at the state level?
« Reply #4 on: December 16, 2014, 03:58:30 PM »
NY state piggybacks off the federal rules, and your income for NYC local taxes is based on your state tax return, so yes you will get the same deductions for both purposes.

Pooperman

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Re: Deferred income at the state level?
« Reply #5 on: December 16, 2014, 04:20:20 PM »
Alabama also does not recognize Hsa contributions. Working in ny and living in nj m and that I will not pay any nj tax except for taxable investments. Because ny tax is higher, I shouldn't be paying much, if any nj taxes... And I have few taxable investments in the first place. Nyc tax does suck though.

oinkette

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Re: Deferred income at the state level?
« Reply #6 on: December 17, 2014, 01:25:06 PM »
Thanks for the responses everyone!