Illinois

JEFFERSON CITY, Mo. — To tax tips or not? That is a question that will confront lawmakers in states across the U.S. as they convene for work next year.

The Trump administration is urging states to follow its lead by enacting a slew of new tax breaks for individuals and businesses, including deductions for tips and overtime wages, automobile loans and business equipment.

In some states, the new federal tax breaks will automatically apply to state income taxes unless legislatures opt out. But in many other states, where tax laws are written differently, the new tax breaks won’t appear on state tax forms unless legislatures opt in.

In states that don’t conform to the federal tax changes, workers who receive tips or overtime, for example, will pay no federal tax on those earnings but could still owe state taxes on them.

States that adopt all of Trump’s tax cuts could provide hundreds of millions of dollars in annual savings to certain residents and businesses. But that could financially strain states, which are being hit with higher costs because of new Medicaid and SNAP food aid requirements that also are included in the GOP’s big bill that Trump signed this summer.

Most states begin their annual legislative sessions in January. To retroactively change tax breaks for 2025, lawmakers would need to act quickly so tax forms could be updated before people begin filing. States also could apply the changes to their 2026 taxes, a decision requiring less haste.

So far, only a few states have taken votes on whether to adopt the tax breaks.

“States in general are approaching this skeptically,” said Carl Davis, research director at the nonprofit Institute on Taxation and Economic Policy.

Treasury presses states to act

The bill Trump signed July 4 contains about $4.5 trillion of federal tax cuts over 10 years.

It creates temporary tax deductions for tips, overtime and loan interest on new vehicles assembled in the U.S. It boosts a tax deduction for older adults. And it temporarily raises the cap on state and local tax deductions from $10,000 to $40,000, among other things. The law also provides numerous tax breaks to businesses, including the ability to immediately write off 100% of the cost of equipment and research.

Forty-one states levy individual income taxes on wages and salaries. Forty-four states charge corporate income taxes.

Treasury Secretary Scott Bessent this month called on those states “to immediately conform” to the federal tax cuts and accused some Democratic-led states that haven’t done so of engaging in “political obstructionism.” Though Bessent didn’t mention it, many Republican-led states also have not decided whether to implement the tax deductions.

“By denying their residents access to these important tax cuts, these governors and legislators are forcing hardworking Americans to shoulder higher state tax burdens, robbing them of the relief they deserve and exacerbating the financial squeeze on low- and middle-income households,” Bessent said.

Some tax analysts contend that there’s more for states to consider. The tax break on tips, for example, could apply to nearly 70 occupational fields under a proposed rule from the Internal Revenue Service. But that would still exclude numerous low-wage workers, said Jared Walczak, vice president of state projects at the nonprofit Tax Foundation.

“Lawmakers need to consider whether these are worth the cost,” Walczak said.

Tips and overtime tax breaks

Because of the way state tax laws are written, the federal tax breaks for tips and overtime wages would have carried over to just seven states: Colorado, Idaho, Iowa, Montana, North Dakota, Oregon and South Carolina. But Colorado opted out of the state tax break for overtime shortly before the federal law was enacted.

Michigan this fall became the first — and so far only — state to opt into the tax breaks for tips and overtime wages, effective in 2026. The overtime tax exemption is projected to cost the state nearly $113 million and the tips tax break about $45 million during its current budget year, according to the state treasury department.

Michigan lawmakers offset that by decoupling from five federal corporate tax changes the state’s treasury estimated would have reduced state tax revenues by $540 million this budget year.

Republican state Rep. Ann Bollin, chair of the Michigan House Appropriations Committee, said the state could not afford to embrace all the tax cuts while still investing in better roads, public safety and education.

“The best path forward is to have more money in people’s pockets and have less regulation — and this kind of moved in that direction,” she said.

Arizona could be among the next states to act. Democratic Gov. Katie Hobbs has called upon lawmakers to adopt the tax breaks for tips, overtime, seniors and vehicle loans, and follow the federal government by also increasing the state’s standard deduction for individual income taxpayers. Republican state House leaders said they stand ready to pass the tax cuts when their session begins Jan. 12.

Corporate tax breaks

In addition to Michigan, lawmakers in Delaware, Illinois, Pennsylvania and Rhode Island have passed measures to block some or all of the corporate tax cuts from taking effect in their states.

A new Illinois law decoupling from a portion of the corporate tax changes could save the state nearly $250 million, said Democratic state Sen. Elgie Sims, chair of the Senate Appropriations Committee. He said that could help ensure continued funding for schools, healthcare and other vital services.

Illinois Gov. JB Pritzker, an outspoken Democratic opponent of Trump, also cited budget concerns for rejecting the corporate tax cut provision. He said states already stand to lose money because of other provisions in Trump’s big bill, such as a requirement to cover more of the costs of running the Supplemental Nutrition Assistance Program, known as SNAP.

“The decoupling is an effort to try to hold back the onslaught from the federal government to make sure that we can support programs like the one we’re announcing today,” Pritzker told reporters at a December event publicizing a grant to address homelessness in central Illinois.

Lieb writes for the Associated Press. AP writer John O’Connor in Springfield, Ill., contributed to this report.

BERKELEY, Calif. — Mike White, who had a successful career as a college coach with California and Illinois and later coached the NFL’s Oakland Raiders, has died. He was 89.

Cal said White’s family confirmed that he died Sunday in Newport Beach.

White helped the Golden Bears win a share of the Pac-8 title in 1975, led the Illini to their first Rose Bowl in 20 years in the 1983 season and coached the Raiders in their first two seasons back in Oakland in 1995-96 after leaving Los Angeles.

He also worked as an assistant for the San Francisco 49ers and was on Dick Vermeil’s staff with the St. Louis Rams when they won the Super Bowl following the 1999 season.

“Mike was special,” said Burl Toler Jr., a linebacker who played at Cal under White from 1974-77. “He treated us like men and with a lot of respect. Mike was a very gifted and smart coach who loved Cal and loved being a coach, and he surrounded himself with a lot of like minds who instilled in us a will to succeed.”

White was a four-sport student-athlete at Cal in the 1950s and spent time as an assistant with the Bears and at rival Stanford before getting the head coaching job at his alma mater in 1972.

White had a 35-30-1 record in six seasons at Cal, with his biggest success coming in 1975 when he was named coach of the year after the Bears finished tied with UCLA for first place in the conference. Cal finished 14th in the nation with an offense that featured Chuck Muncie and quarterback Joe Roth.

White also coached quarterback Steve Bartkowski earlier at Cal and helped develop him into the No. 1 overall pick in the 1975 NFL draft.

He then left for the NFL, spending two seasons as an offensive line coach for the 49ers, before returning to college in 1980 with Illinois. He led the Illini to a 47-41-3 record with three bowl trips, including a loss in the 1984 Rose Bowl to UCLA.

That 1983 Illinois team went 9-0 in the Big Ten and is the only team in conference history to beat every other conference opponent in the same season.

White then returned to the NFL in 1990, spending five seasons as an assistant with the Raiders before taking over as head coach. He had a 15-17 record before getting fired after the 1996 season.

Dubow writes for the Associated Press.

SPRINGFIELD, Ill. — Illinois Gov. JB Pritzker on Tuesday signed a law prohibiting federal officials from taking enforcement actions against immigrants near courthouses, in hospitals, on college campuses or in day care facilities.

The law, which takes effect immediately, is in response to the Trump administration’s crackdown on immigration in the Chicago area, launched in September.

The law also provides for legal steps for those whose constitutional rights were violated during enforcement action, including a $10,000 in damages for someone unlawfully arrested while attempting to attend a court proceeding.

“Dropping your kid off at day care, going to the doctor, or attending your classes should not be a life-altering task,” Pritzker said at a bill-signing in a largely Latino neighborhood in Chicago. “Illinois — in the face of cruelty and intimidation — has chosen solidarity and support.”

The U.S. Immigration and Customs Enforcement’s “Operation Midway Blitz” arrested more than 3,000 people.