'Exceptional' Trees, Newlywed Perks: 5 Weird State Tax Breaks
State tax codes have many quirks. How many of these unusual deductions have you heard of?
- He was named a "40 under 40" by the Houston Business Journal in 2021.
If you're a newlywed, a centenarian or the owner of an "exceptional" tree, there may be an extra tax break for you this year.
Tax season runs from January to April each year, and most Americans file their state tax returns at the same time as their federal return. Since each state has its own tax code, there are many state-specific deductions and credits, and some are more unusual than others.
The most important thing to keep in mind about state taxes is that they're changing all the time, according to Andrew Griffith, CPA and Associate Professor of Accounting at Iona University. "Just because something was deductible in last year's return doesn't mean it will be eligible for this year's return," Griffith said.
Here are five ultra-specific tax deductions and credits you may not have heard of.
Read more: CNET's top software picks for filing your taxes
Alaska: Whaling boat captain deduction
What makes this deduction odd is that whaling in the United States is illegal.
In northern Alaska, however, subsistence whaling is an important activity for certain native peoples. Captains from villages who are selected for this work often take on substantial expenses to do the job, and the majority of the blubber and skin (known as muktuk) they harvest is donated back to the community.
The Alaska Eskimo Whaling Commission was formed in 1977 to preserve and advocate for whaling villages, and in 1999 a tax deduction for whaling boat captains was established. The provision allows for a deduction of up to $10,000 to offset the cost of boat repairs, labor and resources, but it only applies to captains recognized by the commission. The deduction is classified as a charitable contribution since subsistence whaling isn't considered a profit-driven venture.
Hawaii: 'Exceptional tree' deduction
If you have a tree in your yard that you think is just exceptional, and the state of Hawaii agrees, you can leverage it to get a tax break.
By 1975, Hawaii's rapid development had contributed to a loss of exceptional trees and natural beauty. To protect remaining trees, the state of Hawaii passed legislation that required every county to have a County Arborist Advisory Committee, which then establishes operating guidelines and regulations to protect trees of notable stature.
If you have an exceptional tree on your property, you can claim a tax deduction of up to $3,000 once every three years to maintain it. Section 235-19 of the Chapter 235 income tax law explains the exceptional trees tax deduction in more detail.
Additionally, if you want to trim or prune your tree, you need to get approval from the county committee first.
South Carolina: 'Newlywed' tax credit
The Palmetto State wants to help you get your new marriage off on the right foot.
In South Carolina, completing a premarital preparation course within 12 months of getting your marriage license makes couples eligible for a $50 tax credit. Both spouses must complete the course to get the full credit. If only one spouse completes the course, that taxpayer can claim the credit on their individual return and receive a $25 credit. Some licensed professionals based in South Carolina who facilitate the course now offer it online.
This credit has been in effect since 2006. South Carolina hosted more than 29,000 weddings in 2021, according to the South Carolina Department of Revenue.
Mississippi: Reforesting tax credit
If you live in the Magnolia State and own private, nonindustrial land, the Mississippi Land Conservation Assistance Network would like to have a word with you.
The Mississippi Reforestation Tax Credit lets landowners write off up to 50% of the cost of approved pine and hardwood reforestation practices. The lifetime limit for this deduction is $75,000, and you'll need to have an approved reforestation plan from either a graduate or registered forester to be eligible.
You won't be able to double dip and claim land that is already registered in another federal or state land incentive program. Also, the reforestation can't apply to reforestation that involves growing orchards, ornamental trees or Christmas trees.
New Mexico: Centenarian exemption
Oh, it's your birthday for the hundredth time? The state of New Mexico wants to help you celebrate.
The catch is that New Mexico's "centenarian exemption" doesn't kick in until you're at least 100 years old. As long as you've been a resident of the state for at least six months, and can't be claimed as a dependent by anyone else, you'll be exempt from having to pay state income taxes once you turn 100, per New Mexico's tax code. Keep in mind you may still owe federal taxes, though.
It can feel tempting to gloss over your state return during tax filing season, but doing so might leave valuable deductions on the table. Do your due diligence or work with a tax professional to ensure you get the refund you deserve this year.