Quick summary
State conformity decisions decide which federal tax rules a state adopts for its own tax return. When a state “conforms” to the Internal Revenue Code (IRC), many federal itemized deduction rules will apply to state taxable income. When a state “decouples” or adopts only select changes, itemized deductions on the state return can differ materially from the federal return — sometimes benefitting taxpayers, sometimes reducing deductions. (See IRS guidance on itemized deductions and Schedule A for federal rules.)
Sources: IRS Publication 17 and Schedule A instructions (IRS.gov).
Why state conformity matters for itemized deductions
Itemized deductions reduce taxable income and therefore tax liability. On the federal side, taxpayers use Schedule A (Form 1040) to report allowable itemized deductions such as mortgage interest, medical expenses, charitable contributions, and state and local taxes (SALT). States decide whether to accept those federal deductions for state tax purposes by one of three approaches:
- Full conformity: The state adopts the IRC as amended (either automatically or by reference). Federal changes generally apply to state returns.
- Rolling/limited conformity: The state conforms to the IRC as of a specific federal date (e.g., “IRC as of December 31, 2023”) or adopts certain federal provisions and not others.
- No conformity / decoupling: The state writes its own rules and rejects or modifies federal changes.
Because of those choices, a taxpayer’s federal Schedule A total can be different from their state itemized deductions. Examples include how the SALT cap works, mortgage interest limits from the Tax Cuts and Jobs Act (TCJA), and whether a state continues to allow personal exemptions or other deductions the federal government removed.
Authoritative links for deeper reading: state rules overview on our site: “State Tax Conformity” (https://finhelp.io/glossary/state-tax-conformity/) and “How Federal Tax Law Changes Affect State Conformity and Your Return” (https://finhelp.io/glossary/how-federal-tax-law-changes-affect-state-conformity-and-your-return/).
Common itemized deduction areas affected
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Mortgage interest: The TCJA reduced the acquisition debt limit to $750,000 for mortgages taken out after December 15, 2017. Some states have chosen not to adopt that change, allowing higher mortgage interest deductions on the state return. Verify your state’s position each year.
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Medical expenses: Federal rules allow itemized medical expenses to the extent they exceed a percentage of adjusted gross income (AGI). States may keep a different threshold or use their own definitions of allowable medical costs.
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SALT (State and Local Taxes): The federal SALT deduction has been capped at $10,000 since the TCJA. States may provide their own credits or deductions to offset the federal cap or treat SALT differently for state returns.
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Charitable deductions: Most states conform to federal treatment for charitable gifts, but a few have specific differences for how noncash gifts, conservation easements, or donor-advised funds are treated.
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Personal exemptions and standard deduction: Some states retained personal exemptions or different standard deduction rules that the federal government eliminated or changed under past federal reforms.
For a practical comparison of differences between federal and state items, see our related guide, “State vs Federal Deductions: Navigating Different Rules” (https://finhelp.io/glossary/state-vs-federal-deductions-navigating-different-rules/).
Real-world scenarios I’ve seen in practice
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A homeowner in State A benefited because the state did not adopt the TCJA mortgage limit. Their state taxable income allowed mortgage interest on acquisition debt over $750,000, lowering state tax.
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A taxpayer in State B expected to deduct large unreimbursed medical expenses at the state level; the state used a higher AGI threshold, sharply reducing deductible amounts.
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After the SALT cap, several states offered workarounds (state tax credits, pass-through entity electing pay options) that reduced state taxable income but required different reporting. These state-level responses illustrate how conformity choices shape taxpayer outcomes.
In my practice, I run parallel federal and state calculations when federal law changes to identify material differences and advise clients on timing (pre-paying SALT under certain rules, accelerating or deferring charitable gifts in specific years, or considering mortgage refinance timing).
Step-by-step actions taxpayers and preparers should take
- Confirm your state’s current conformity posture for the tax year you’re filing. Visit your state revenue department or the authoritative state publication for the tax year. Many states publish a yearly conformity bulletin.
- Run parallel returns. Always compute federal and state itemized deduction totals separately — don’t assume equality.
- Check for state-specific adjustments. Some states require additions or subtractions to federal AGI (for example, a subtraction for state-level pension income or adjustments for decoupled federal provisions).
- Use timing strategies where reasonable. If your state’s conformity is expected to change or you can accelerate/delay deductible items (charitable gifts, SALT payments to municipalities that offer credits), simulate scenarios.
- Document and disclose. Keep clear records of any state-specific deductions and the legal basis; include required schedules on state returns and retain supporting receipts.
Examples of planning opportunities and pitfalls
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Planning opportunity: If your state allows mortgage interest above the federal TCJA cap, accelerating deductible mortgage interest into the year of sale or refinance may reduce state tax.
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Pitfall: Prepaying state income taxes expecting a full federal deduction can backfire if your state disallows the federal deduction or provides a credit instead. Simulation is essential.
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Compliance trap: Some states treat federal credits or adjustments as taxable income for state purposes. Don’t assume a federal deduction or credit removes state tax exposure.
Frequently asked operational questions
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Who is affected? Taxpayers who itemize on either a federal or state return, owners of homes with large mortgages, taxpayers with high medical expenses, and those paying significant state/local taxes.
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How often do states change conformity? States can change conformity each legislative session or by administrative update. Major federal reforms (for example, the TCJA) often prompt many states to re-evaluate.
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Can I claim federal itemized deductions even if my state doesn’t conform? Yes. Federal itemized deductions are claimed on your federal return regardless of state conformity. State conformity only affects the state tax return.
Where to look up your state’s rules
- Start with your state’s department of revenue website and their annual tax bulletin.
- Consult the state’s published tax forms and instructions for the relevant tax year.
- For practitioner-focused summaries, see our glossary pages: “How Federal Tax Law Changes Affect State Conformity and Your Return” (https://finhelp.io/glossary/how-federal-tax-law-changes-affect-state-conformity-and-your-return/), “State Tax Conformity” (https://finhelp.io/glossary/state-tax-conformity/), and “State vs Federal Deductions: Navigating Different Rules” (https://finhelp.io/glossary/state-vs-federal-deductions-navigating-different-rules/).
Authoritative federal sources: IRS Publication 17 and Schedule A instructions for details about federal itemized deductions (https://www.irs.gov/forms-pubs/about-publication-17 and https://www.irs.gov/forms-pubs/about-schedule-a-form-1040).
Consumer-facing context: Consumer Financial Protection Bureau materials on taxes and financial planning can be helpful for lay readers (https://www.consumerfinance.gov).
Professional disclaimer
This content is educational and does not constitute individualized tax advice. Tax laws — federal and state — change frequently. For personalized advice about your situation, consult a licensed CPA, enrolled agent, or state tax professional who can apply current law to your facts.
Quick checklist for tax season
- Verify state conformity for the tax year you’re filing.
- Run separate federal and state itemized deduction calculations.
- Consider timing deductible items when conformity differences create planning opportunities.
- Keep detailed records supporting state-specific adjustments.
- If material differences appear, consult a tax professional to determine whether amending prior returns is appropriate.
Additional reading and resources
- IRS: Publication 17 and Schedule A instructions (https://www.irs.gov/forms-pubs/about-publication-17; https://www.irs.gov/forms-pubs/about-schedule-a-form-1040)
- FinHelp guides: “State Tax Conformity” (https://finhelp.io/glossary/state-tax-conformity/), “How Federal Tax Law Changes Affect State Conformity and Your Return” (https://finhelp.io/glossary/how-federal-tax-law-changes-affect-state-conformity-and-your-return/), “State vs Federal Deductions: Navigating Different Rules” (https://finhelp.io/glossary/state-vs-federal-deductions-navigating-different-rules/)
- Your state department of revenue website (search “[your state] conformity to IRC” for the latest bulletin).
(Prepared by a CPA with 15+ years of tax practice; content current as of 2025.)
