Law Tracker

Pass-through businesses can elect to pay the 4% surtax on owners' income above the threshold at the entity level, and owners get a 90% credit. This can turn surtax into a business deduction outside the federal SALT cap.

Second homes assessed above $1 million pay $2.50 per $500 of value above $1 million each year ($5,000 on a $2 million home). Properties rented 183+ days a year are exempt.

Would levy a one-time 5% tax on net worth above $1 billion, valued Dec. 31, 2026 and payable over five years with a deferral charge. Roughly 200 California residents would be affected.

An annual surcharge on New York City homes that are not the owner's primary residence. Condos and co-ops worth more than $1 million face tiered rates of 4%-6.5%, and 1-3 family homes worth more than $5 million face 0.8%-1.3%.

Washington's first broad income tax: 9.9% on income above a $1 million deduction, shared by married couples, with credit for capital gains tax paid. A constitutional challenge was filed in April 2026, and the state Supreme Court blocked a referendum in May.

Returns the top estate tax rate from 35% to 20% while keeping the $3 million exemption. Inflation indexing of the exemption is left uncertain, which matters for Washington estates above $3 million.

The 4% surtax (9% top rate) applies above $1,083,150 for 2025; secondary sources report $1,107,750 for 2026, not confirmed on mass.gov. It is especially costly in a year with a large one-time gain such as a business or home sale.

Extends the temporary top rates of up to 10.9% for income above $25 million (9.65% and 10.3% tiers below), keeping New York and New York City among the highest combined rates.

New Jersey now excludes gain on qualified small business stock similar to federal Section 1202, removing up to 10.75% state tax on qualifying start-up exits.

Missouri became the first state with an income tax to exempt capital gains, and from 2026 non-Missouri-source income of resident trusts and estates is also exempt.

A single 2.75% rate on nonbusiness income over $26,050 replaces the 3.125% top rate. Personal exemptions and the joint filing credit are now limited to MAGI of $500,000 or less.

The flat rate fell from 4.25% to 3.99%, the final scheduled step. It saves about $2,600 a year per $1 million of income.

The top rate fell from 5.2% to 4.55% and is scheduled to reach 3.99% in 2027; Nebraska still levies a county inheritance tax.

The flat rate fell from 4% to 3.5% under revenue triggers ratified by H.B. 1 (2025); Kentucky retains its inheritance tax on non-close relatives.

Six brackets became three and the top rate dropped from 4.75% to 4.5%. The law also adds triggers for further 0.25-point cuts when revenue conditions are met.

The top ordinary rate fell from 5.9% to 5.65% and capital gains brackets were realigned. Montana's new split property tax roll raises taxes on second homes and short-term rentals from 2026.

Virginia business owners can keep using the entity-level tax to get around the federal SALT cap for 2026. However, the credit for PTET paid to other states expired, hurting multistate owners.

A new IRA-type account for children: up to $5,000 a year in contributions, of which employers can contribute $2,500 tax-free. A $1,000 federal seed deposit goes to citizen children born 2025-2028, and proposed regulations are still pending.

The 401(k) deferral limit rises to $24,500, the total defined-contribution limit to $72,000, the IRA limit to $7,500 and the compensation limit to $360,000. The age 60-63 super catch-up stays at $11,250.

Sets the 2026 numbers: the 37% bracket starts at $640,600 single / $768,700 joint, the 20% capital gains rate at $545,500 / $613,700, and the standard deduction is $16,100 / $32,200.

Employees whose prior-year FICA wages from the employer exceeded $150,000 (2026 threshold) must make 401(k)/403(b)/457 catch-up contributions as after-tax Roth, losing the upfront deduction.

Made the TCJA rate brackets, higher standard deduction and QBI structure permanent. Also rewrote the SALT, estate, AMT, charitable and small-business-stock rules that matter most to high earners.

The cap is reduced once MAGI exceeds $500,000 (2025) or $505,000 (2026), but never below $10,000. Filers with roughly $600,000+ MAGI are back to $10,000, which makes pass-through entity tax elections valuable again.

The feared halving of the exemption at end-2025 did not happen: each person has $15,000,000 in 2026 ($30 million for a married couple). Pressure to make large 2025 gifts disappeared.

The Pease limitation stays repealed, but a new rule limits the tax benefit of itemized deductions for taxpayers in the 37% bracket. Affects large charitable, mortgage interest and SALT deductions.

Itemizers can deduct only charitable gifts above 0.5% of AGI ($5,000 of lost deductions at $1 million AGI). The floor makes bunching gifts, donor-advised funds and QCDs more attractive.

Cash gifts up to $1,000 ($2,000 married filing jointly) are deductible without itemizing. Mainly relevant to high earners who now take the standard deduction because of the SALT phase-down.

The exemption now phases out from $500,000 (single) and $1,000,000 (joint) instead of about $626,000 and $1.25 million in 2025. Exercising ISOs and large state tax bills are more likely to trigger AMT.

Taxpayers 65+ get an extra $6,000 deduction ($12,000 if both spouses qualify), phased out above MAGI of $75,000 ($150,000 joint). Most high earners are phased out entirely.

The per-issuer cap rises to $15 million (indexed from 2027), with 50%, 75% or 100% of the gain excluded after 3, 4 or 5 years. Companies can now issue qualifying stock with up to $75 million in gross assets, which matters to founders, early employees and angel investors.

Deductions of up to $25,000 for tips and $12,500 ($25,000 joint) for overtime, phased out above MAGI of $150,000 ($300,000 joint). Most high earners get little or nothing; employers need them for payroll reporting.

Up to $10,000 of interest a year, phased out above MAGI of $100,000 ($200,000 joint), so high earners largely cannot use it.

Business owners and real estate investors (including through cost segregation) can again expense qualifying property immediately. Treasury issued interim guidance and plans proposed regulations.

Owners of operating businesses can expense up to $2,500,000 of qualifying property for 2025 ($2,560,000 for 2026 after indexing), reduced dollar-for-dollar once purchases exceed $4,000,000 (2025).

The new, used and commercial EV credits (30D, 25E, 45W) are no longer available. Buyers of luxury EVs lost the credit entirely.

The 25C home improvement credit and 25D credit (solar, batteries, geothermal) ended after 2025. Homeowners who installed after year-end get no federal credit.

High-deductible plans can cover telehealth before the deductible without costing HSA eligibility, and Notice 2026-5 answers questions on the wider expansion. Keeps the triple-tax-free HSA open to more families.

A nonrefundable credit of up to $1,700 a year for donations to qualifying scholarship-granting organizations in participating states, with a 5-year carryforward. Treasury requested comments in Notice 2025-70.

Adds a 2.9% tier so gains above $1 million are taxed at 9.9%. Raised the estate exemption to $3 million while lifting the top estate rate to 35%.

Added 6.25% and 6.5% brackets above $500,000 and $1 million, plus a 2% surtax on capital gains when federal AGI exceeds $350,000. Itemized deductions are reduced by 7.5% of AGI above $200,000.