21 states where inflation hits the hardest at tax time

Inflation has been in the news a lot lately, as prices for everything from hotel rooms to used cars and gas continue to rise rapidly.

But a less discussed aspect of inflation is how it affects your state income tax bill. Some states, like the federal government, factor inflation into main tax rules to protect your hard-earned dollars, while others do not.

The result? If you live in a state that does not take inflation into account at tax time, your tax bill may go up even if your income itself does not increase. This leaves you with less income to spend after tax, which is especially painful when prices are higher due to rising inflation, as we’ve seen recently.

This situation is described in a recent report by the Tax Foundation, which then examines how different states ‘index’ aspects of their tax rules to account for inflation, including two tax breaks: standard deductions and deductions. personal.

Here’s a look at the states that don’t index these tax breaks to inflation, and what that means for their residents.

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