State Income Tax Rates
All 50 states' income tax rates for 2025, including no-tax states, flat-tax states, and graduated systems
Key Numbers
No Income Tax
8 States
Highest
CA (13.3%)
Flat Tax States
14
SALT Cap
$10,000
State income taxes vary dramatically across the U.S. — from 0% in eight states to 13.3% in California. Understanding your state's tax structure helps with financial planning, relocation decisions, and retirement strategies. Forty-two states levy individual income taxes; 14 use flat rates, 28 (plus D.C.) use graduated brackets, and Washington taxes only capital gains.
Tax Structure Summary (2025)
| Tax Structure | States | Count |
|---|---|---|
| No Income Tax | AK, FL, NV, NH, SD, TN, TX, WY | 8 |
| Capital Gains Only | WA (7%–9.9% on gains above $278K) | 1 |
| Flat Tax | AZ, CO, GA, ID, IL, IN, IA, KY, LA, MI, MS, NC, PA, UT | 14 |
| Graduated Tax | AL, AR, CA, CT, DE, HI, KS, ME, MD, MA, MN, MO, MT, NE, NJ, NM, NY, ND, OH, OK, OR, RI, SC, VT, VA, WV, WI, DC | 28 |
Highest & Lowest Top Marginal Rates
| Highest Tax States | Lowest Tax States (with income tax) | ||
|---|---|---|---|
| California | 13.3% | North Dakota | 2.5% |
| Hawaii | 11.0% | Arizona | 2.5% |
| New York | 10.9% | Ohio | 2.75% |
| New Jersey / D.C. | 10.75% | Indiana | 3.0% |
| Oregon | 9.9% | Pennsylvania | 3.07% |
SALT deduction: Under the OBBBA (2025), the federal deduction for state and local taxes increased to $40,000 ($20,000 MFS) for 2025–2029, up from the prior $10,000 cap. The deduction phases out by 30% of MAGI above $500,000, reverting to $10,000 at $600,000+.
No Income Tax States
Eight states levy no individual income tax on wages or salaries. New Hampshire became the 8th no-tax state in 2025 after repealing its interest and dividends tax. Washington taxes only long-term capital gains.
| State | Notes | Sales Tax | Eff. Property Tax |
|---|---|---|---|
| Alaska | No sales tax; PFD payments to residents | 0% | ~1.04% |
| Florida | Popular retirement destination | 6.0% | ~0.89% |
| Nevada | Gaming revenue funds state budget | 6.85% | ~0.55% |
| New Hampshire | I&D tax repealed 2025; no sales tax | 0% | ~2.09% |
| South Dakota | Trust-friendly laws | 4.5% | ~1.22% |
| Tennessee | Hall Tax (investment income) repealed 2021 | 7.0% | ~0.67% |
| Texas | Constitutional prohibition on income tax | 6.25% | ~1.68% |
| Wyoming | Mineral extraction revenues | 4.0% | ~0.56% |
Property tax rates are approximate effective rates (tax as % of home value). Local rates vary significantly.
Washington: Capital Gains Tax
Washington doesn't tax wages or salary but imposes a tiered capital gains tax on long-term gains exceeding the $278,000 standard deduction (2025). As of 2025, gains up to $1 million are taxed at 7% and gains above $1 million at 9.9% (a 2.9% surcharge added retroactively via SB 5813). Real estate and retirement accounts are exempt.
Trade-off: No-tax states typically offset lost revenue through higher property taxes (TX, NH), higher sales taxes (TN at 7%+), or natural resource revenues (AK, WY). Evaluate total tax burden, not just income tax.
Flat Tax States
Fourteen states use a flat (single-rate) income tax, applying the same rate to all taxable income. Since 2021, multiple states have converted from graduated to flat systems: Arizona (2023), Georgia (2024), Iowa (2025), Kentucky (2023), and Louisiana (2025).
| State | Rate | Notes |
|---|---|---|
| Arizona | 2.50% | Reduced from 2.98% in 2023 |
| Colorado | 4.40% | Reduced from 4.55% via TABOR |
| Georgia | 5.19% | Reduced from 5.39% mid-2025; targeting 4.99% |
| Idaho | 5.695% | Reduced from 5.8% in 2024 |
| Illinois | 4.95% | Constitutionally required to be flat |
| Indiana | 3.00% | Reducing to 2.9% by 2027 |
| Iowa | 3.80% | Converted to flat in 2025 |
| Kentucky | 4.00% | Converted from graduated in 2023 |
| Louisiana | 3.00% | Major reform in 2025 |
| Michigan | 4.25% | |
| Mississippi | 4.40% | Applies to income over $10,000 |
| North Carolina | 4.25% | Reducing to 3.99% in 2026 |
| Pennsylvania | 3.07% | One of the lowest flat rates |
| Utah | 4.55% | Reduced from 4.65% in 2024 |
Trend: The movement toward flat taxes continues to accelerate. Nine states cut individual income tax rates in 2025, and several graduated-tax states are considering flat tax conversions. Georgia is targeting elimination of its income tax entirely.
Graduated Tax States
Twenty-eight states plus D.C. use graduated (progressive) tax systems with multiple brackets, ranging from 2 brackets (Kansas, Montana) to 12 (Hawaii). Higher incomes are taxed at higher marginal rates.
Top Marginal Rates by State (2025, Single Filers)
| State | Top Rate | Top Bracket Starts | # Brackets |
|---|---|---|---|
| California | 13.3% | $1,000,000 | 10 |
| Hawaii | 11.0% | $325,000 | 12 |
| New York | 10.9% | $25,000,000 | 9 |
| New Jersey | 10.75% | $1,000,000 | 7 |
| D.C. | 10.75% | $1,000,000 | 7 |
| Oregon | 9.9% | $125,000 | 4 |
| Minnesota | 9.85% | $198,630 | 4 |
| Massachusetts | 9.0% | $1,083,150 | 2 |
| Vermont | 8.75% | $242,000 | 4 |
| Wisconsin | 7.65% | $323,290 | 4 |
| Maine | 7.15% | $63,450 | 3 |
| Connecticut | 6.99% | $500,000 | 7 |
| Delaware | 6.6% | $60,000 | 6 |
| South Carolina | 6.2% | $17,830 | 3 |
| Rhode Island | 5.99% | $181,650 | 3 |
Top bracket thresholds shown for single filers. Many states double thresholds for married filing jointly. Massachusetts rate includes a 4% surtax on income above ~$1.08M.
Notable Local Income Taxes
| Locality | Local Rate | Notes |
|---|---|---|
| New York City | 3.08%–3.88% | On top of NY state tax; residents only |
| Maryland Counties | 2.25%–3.20% | All counties levy local income tax |
| Ohio Cities | Up to 3% | Most major cities have local tax |
| Philadelphia, PA | 3.75% | Highest local rate; on top of PA 3.07% flat |
Remote work: If you work remotely for a company in another state, you may owe taxes in both states. Check reciprocity agreements and "convenience of employer" rules (notably in New York) that may require non-resident tax payments.
Sources
- 1.Tax Foundation — 2025 State Individual Income Tax Rates and Brackets
- 2.Tax Foundation — Facts & Figures 2025: How Does Your State Compare?
- 3.IRS — State Government Websites (Tax Forms & Info)
- 4.Washington Dept. of Revenue — Capital Gains Tax (Tiered Rates 2025)
- 5.Georgia Dept. of Revenue — 2025 Tax Updates (HB 111, 5.19% Rate)
- 6.Venable LLP — Final OBBBA Temporarily Expands SALT Cap
This content is for educational and informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for guidance tailored to your situation.