2 states lowering taxes due to federal reform

It’s not just your federal income tax bill that stands to be impacted by the recent federal tax code overhaul. Your state income tax tab could change, too.

A couple of states have already enacted legislation to lower taxes, and more are expected to follow, the Tax Foundation reported recently.

These changes stem from the fact that state tax codes generally conform to many federal tax code provisions. Because of federal tax reform, states may experience higher collection rates — largely due to things like the repeal of the personal exemption, reduction of itemized deductions, and limitations on the interest deduction.

RELATED: States where Americans pay the highest in state income taxes

This content is not available due to your privacy preferences.
Update your settings here to see it.

As a result, states may see more tax revenue, according to the foundation:

“How these provisions affect revenues varies from state to state, but most states can expect higher collections because of federal tax reform.”

Some states have decided to give these new revenues back to taxpayers in the form of a tax cut.

It's not the usual blah, blah, blah. Click here to sign up for our free newsletter.

In Idaho, for example, conforming with the new federal tax code will increase that state’s tax revenue by an estimated $97.4 million this year, according to the Idaho State Tax Commission.

By far the biggest factor contributing to that increase is the state’s conforming with the federal government’s killing of the personal exemption. In other words, Idaho taxpayers won’t be able to claim that tax deduction on their federal or state tax returns.

The upside is that Idaho lawmakers responded by lowering state income tax rates a tad. The recently adopted House Bill 463 lowers Idaho’s income tax rate for individuals by 0.475 of a percentage point across the board and lowers the corporate income tax rate by 0.475 of a percentage point, among other changes.

Georgia is the other state that so far has adopted legislation to lower state income taxes. Georgia’s House Bill 918 will lower the top individual and corporate income tax rates from 6 to 5.5 percent by 2020, among other changes.

State legislation that would have similar impacts is also being actively considered in other states, according to the Tax Foundation.

What’s your take on this news? Sound off below or on our Facebook page.

Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.
Filing Your Taxes Late
What do you do if you can't meet the IRS filing deadline? Learn more about filing a tax extension, late payment and late filing penalties, and what to do if you can't pay your taxes.
Read MoreBrought to you byTurboTax.com
How to File an Amended Tax Return with the IRS
Did you make a mistake on your tax return or realize you missed out on a valuable tax deduction or credit? You can file an amended tax return to make the correction. Filing an amended tax return with the IRS is a straightforward process. This article includes step-by-step instructions for when and how to amend your tax return using Form 1040-X.
Read MoreBrought to you byTurboTax.com
Taxes 2021: 7 Upcoming Tax Law Changes
Tax Year 2021 will likely bring some surprises, but some of its changes are already planned. Here's what you need to know about some of the planned phase-outs, changes and inflation adjustments the IRS will present for taxes in 2021.
Read MoreBrought to you byTurboTax.com
Ways to Increase Your Tax Refund You Never Thought About
Laying the groundwork for a tax refund requires some simple tax planning, a little research and some forethought. Reviewing your tax status, consulting your spouse when filling out your W-4s and taking advantage of several tax credits can help you increase your tax refund. TurboTax also can help decide which credits can get you the biggest refund.
Read MoreBrought to you byTurboTax.com