The fictional state of Lincoln currently conforms to the Internal Revenue Code. Lincoln begins its state income tax calculation with federal taxable income. This year, on December 3, Congress passed legislation retroactively changing the AGI threshold for deductible itemized medical expenses from 10% of AGI to 7.5% of AGI for the current taxable year. Which of the following correctly describes the treatment of medical expenses on a Lincoln state tax return? The %-of-AGI threshold for deductible medical expenses on a Lincoln state return will:

1-Remain at 10% unless Lincoln updates its conformity date to a date on or after December 3.

2-- Automatically change to 7.5% unless Lincoln decouples from the federal change.

3-Be unaffected by the federal law change because Lincoln itemized deductions do not carry from the federal return.

4- Remain at 10% for this year, but automatically change to 7.5% for next year.