Republican caucus advances tax‑conformity package; bill decouples some credits and adds deductions

House Bill 4,152, presented to the Republican caucus, would enact full conformity with the federal tax code for tax years 2025 and 2026, while carving out and changing several state tax provisions.

Staff summarized the principal components: "It'll enact full conformity for tax year '25 and for tax year 2026," add a $6,000 deduction for contributions to Roth individual retirement accounts, create a deduction for certain retirement distributions for taxpayers 60 or older, increase the dependent tax credit from $100 to $125 for dependents aged 17, and add a child and dependent care expense deduction in excess of the federal credit. The bill also decouples or repeals a set of credits: certain renewable energy production credits, residential solar credits and the refundable portion of an increased research activity credit were listed for repeal, some retroactively effective to July 1, 2026.

Chairman Gress and other Republican leaders framed the measure as tax relief for families and small businesses. "We're providing new deductions related to no tax on tips, no tax on overtime, senior deduction, childcare deduction," Gress said, arguing that the package returns dollars to taxpayers and simplifies compliance.

Caucus members also debated the scope and distributional effects of decoupling and repeal provisions. Questions focused on how many filers take the standard deduction and which taxpayers would be affected by the changes. Staff told members that a large majority of filers take the standard deduction and that certain items are intended to expand the gains to more filers.

Members described the tax package as central to the dispute with Governor Hobbs, who has vetoed prior conformity measures; caucus leaders urged quick floor action and suggested the measures would reduce the state’s tax burden without raising rates.