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1040 States

Calculate AGI for a state (AGI vs Build-up)

There are generally 2 methods that states use to calculate adjusted gross income for individuals on their state income tax return.

Method 1 (AGI)

This method starts with federal adjusted gross income (AGI) or federal taxable income (TI). If the state has different tax treatments for certain items (income, deductions, etc.), adjustments are either added to or subtracted from this federal amount to arrive at AGI for state purposes. UltraTax CS provides an AGI worksheet in Forms view for states that follow this method. You can make adjustments to state amounts on this worksheet.

Method 2 (Build-up)

This method separately reports all items that make up taxable income according to how the state defines taxable income. Some states differ on what income is taxable, so state income is likely not the same as federal income. Since this method builds up certain components of income individually to arrive at AGI for state purposes, separate worksheets for each type of income are available in Forms view for states that follow this method.
The following table provides a quick reference of what method each state uses as well as what common adjustments that states may make.
State
Method 1 (AGI)
Method 2 (Build-up)
Pension subtraction
Depreciation adjustments
Social Security subtraction
Child care credit
Notes
Alabama
N/A
Yes
Yes
Yes
N/A
N/A
N/A
Arkansas
MAGI
N/A
Yes
Yes
Yes
Yes
N/A
Arizona
AGI
N/A
Yes
Yes
Yes
N/A
N/A
California
N/A
Yes
Yes
Yes
Yes
Yes
N/A
Colorado
TI
N/A
Yes
N/A
Yes
Yes
N/A
Connecticut
AGI
N/A
N/A
Yes
Yes
N/A
N/A
District of Columbia
AGI
N/A
Yes
Yes
Yes
Yes
N/A
Delaware
AGI
N/A
Yes
N/A
Yes
Yes
N/A
Georgia
AGI
N/A
Yes
Yes
Yes
Yes
N/A
Hawaii
N/A
Yes
Yes
Yes
Yes
Yes
N/A
Iowa
MAGI
N/A
Yes
Yes
Yes
Yes
MAGI = Federal AGI before federal NOL, if applicable.
Idaho
AGI
N/A
Yes
Yes
Yes
Yes
N/A
Illinois
AGI
N/A
Yes
Yes
Yes
N/A
N/A
Indiana
AGI
N/A
Yes
Yes
Yes
N/A
N/A
Kansas
AGI
N/A
Yes
N/A
Yes
Yes
N/A
Kentucky
AGI
Yes
Yes
Yes
Yes
Yes
Kentucky is a partial build-up state. It takes federal AGI and adjusts for differences in federal and state tax law.
Louisiana
AGI
N/A
Yes
N/A
Yes
Yes
N/A
Massachusetts
N/A
Yes
Yes
Yes
Yes
Yes
N/A
Maryland
AGI
N/A
Yes
Yes
N/A
Yes
N/A
Maine
AGI
N/A
Yes
Yes
Yes
Yes
N/A
Michigan
AGI
N/A
Yes
N/A
Yes
N/A
N/A
Minnesota
TI
N/A
N/A
Yes
N/A
Yes
Minnesota accepts the itemized or standard deduction taken on the federal level.
Missouri
AGI
N/A
Yes
OLD
Yes
N/A
N/A
Mississippi
MAGI
N/A
Yes
Yes
N/A
N/A
N/A
Montana
AGI
N/A
Yes
N/A
N/A
Yes
N/A
North Carolina
AGI
N/A
Yes
Yes
Yes
N/A
N/A
North Dakota
TI
N/A
Yes
N/A
Yes
N/A
N/A
Nebraska
AGI
N/A
N/A
N/A
Yes
Yes
N/A
New Hampshire
INT
N/A
N/A
Yes
N/A
N/A
New Hampshire only taxes income on interest and dividends.
New Jersey
N/A
Gross Income
Yes
Yes
N/A
X (starting in 2018)
New Jersey is a partial build-up state starting with items categorized as gross income.
New Mexico
AGI
N/A
N/A
N/A
N/A
N/A
N/A
New York
MAGI
N/A
Yes
Yes
Yes
Yes
N/A
Ohio
AGI
N/A
Yes
Yes
Yes
N/A
N/A
Oklahoma
AGI
N/A
Yes
N/A
Yes
Yes
N/A
Oregon
AGI
N/A
Yes
Yes
Yes
N/A
N/A
Pennsylvania
N/A
Gross income
N/A
Yes
N/A
N/A
Pennsylvania is a partial build-up state in that it is limited to 8 classes of total income.
Rhode Island
AGI
N/A
Yes
Yes
N/A
N/A
N/A
South Carolina
TI
N/A
Yes
Yes
Yes
X; 7% of federal expenses
N/A
Tennessee
INT
N/A
N/A
N/A
N/A
N/A
Tennessee only taxes income on interest and dividends.
Utah
AGI
N/A
Yes
N/A
N/A
N/A
N/A
Virginia
AGI
N/A
Yes
Yes
Yes
N/A
N/A
Vermont
MAGI
N/A
N/A
Yes
Yes
Yes
MAGI = Federal AGI without regard to IRC ยง 168(k)
Wisconsin
AGI
Yes
Yes
Yes
N/A
N/A
WI typically starts with the federal AGI. If there are WI law differences, the build-up method is used.
West Virginia
AGI
N/A
Yes
N/A
N/A
N/A
N/A
AGI = Adjusted gross income
MAGI = Modified adjusted gross income
TI = Taxable income
INT = Interest or dividend return only

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual
  • State: All states, Alabama
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