Which States Don't Tax Tips & Overtime?
The federal OBBBA deduction is one thing — whether your state also exempts tips and overtime is a separate question with 51 different answers. Here's the full breakdown.
Quick answer
9 states have no state income tax at all, so tips and overtime are automatically state-tax-free there. 10 states with an income tax have passed legislation conforming to the federal deduction. The rest still tax tips and overtime at the state level even though the federal deduction applies.
No state income tax (9 states)
Tips and overtime are already free of state income tax here — conformity is moot.
Conformed to the federal deduction (10)
These states have an income tax but passed legislation to exempt tips and/or overtime the same way the federal government does.
Still taxes tips & overtime at the state level (32)
These states have an income tax and have not (yet) conformed to the OBBBA deduction. The estimate below is the state tax owed on $10,000 of tips at each state's rate used in our calculator — federal tax is still reduced, but the state portion is not.
| State | Status | Est. tax on $10k tips |
|---|---|---|
| Minnesota | Not conformed | $985 |
| California | Pending | $930 |
| New Jersey | Not conformed | $897 |
| District of Columbia | Not conformed | $895 |
| Vermont | Not conformed | $875 |
| Hawaii | Not conformed | $800 |
| Wisconsin | Not conformed | $765 |
| Maine | Not conformed | $715 |
| Connecticut | Not conformed | $699 |
| Delaware | Not conformed | $660 |
| South Carolina | Not conformed | $650 |
| West Virginia | Not conformed | $650 |
| Rhode Island | Not conformed | $599 |
| New Mexico | Not conformed | $590 |
| Nebraska | Not conformed | $584 |
| Maryland | Not conformed | $575 |
| Virginia | Not conformed | $575 |
| Kansas | Not conformed | $550 |
| Alabama | Not conformed | $500 |
| Massachusetts | Not conformed | $500 |
| Oklahoma | Not conformed | $500 |
| Georgia | Partial | $499 |
| Illinois | Not conformed | $495 |
| Missouri | Not conformed | $480 |
| Utah | Not conformed | $465 |
| North Carolina | Not conformed | $450 |
| Arkansas | Not conformed | $440 |
| Kentucky | Not conformed | $400 |
| Louisiana | Not conformed | $400 |
| Mississippi | Not conformed | $400 |
| Ohio | Pending | $399 |
| Pennsylvania | Not conformed | $307 |
How this is sourced: state tax rates are the flat/top-marginal rate used throughout this calculator; conformity status is tracked against state legislation on the State Conformity Tracker. See our methodology and sources for details. Data last verified August 1, 2026.