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 nine states to 13.3% in California. Understanding your state's tax structure helps with financial planning, relocation decisions, and retirement strategies. As of 2026, 41 states levy individual income taxes; 15 use flat rates, 27 (plus D.C.) use graduated brackets, and Washington taxes only capital gains. Several states have legislated further reductions through 2030 and beyond.
Tax Structure Summary (2026)
| 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; millionaire income tax effective 2028) | 1 |
| Flat Tax | AZ, CO, GA, ID, IL, IN, IA, KY, LA, MI, MS, NC, OH, PA, UT | 15 |
| Graduated Tax | AL, AR, CA, CT, DE, HI, KS, ME, MD, MA, MN, MO, MT, NE, NJ, NM, NY, ND, OK, OR, RI, SC, VT, VA, WV, WI, DC | 27+D.C. |
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% |
2026 rate changes (effective Jan 1, 2026):
- Kentucky 4.0% → 3.5% flat (trigger enacted by H.B. 1; further reductions possible to 0%)
- Indiana 3.0% → 2.95% flat (drops again to 2.9% in 2027)
- Mississippi 4.4% → 4.0% flat (phasing to 3% by 2030, targeting 0% thereafter)
- North Carolina 4.25% → 3.99% flat (final step in phasedown; further cuts possible 2027–2034)
- Ohio converted to flat 2.75% on income above $26,050 (was 2-bracket graduated)
- Nebraska top rate 5.2% → 4.55% (continues to 3.99% in 2027)
- Montana top rate 5.9% → 5.65% (drops to 5.4% in 2027)
- Oklahoma top rate 4.75% → 4.5%; simplified from 6 to 3 brackets
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; adjusted annually for inflation). Gains up to $1 million are taxed at 7%; gains above $1 million at 9.9% (surcharge added via SB 5813). Real estate and retirement accounts are exempt. In March 2026, the legislature passed SB 6346 imposing a 9.9% tax on household income above $1 million — effective January 1, 2028 — which would reclassify Washington as a partial income-tax state if signed into law.
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
Fifteen states now use a flat (single-rate) income tax, applying the same rate to all taxable income. Ohio joined this group in 2026. Since 2021, ten states have converted from graduated to flat systems: Arizona (2023), Georgia (2024), Iowa (2025), Kentucky (2023), Louisiana (2025), and Ohio (2026), among others. Multiple flat-tax states have enacted phased reductions through 2030 and beyond.
| State | Rate (2026) | Notes & Trajectory |
|---|---|---|
| Arizona | 2.50% | Reduced from 2.98% in 2023; no further cuts scheduled |
| Colorado | 4.40% | Reverted from 4.25% (2024 TABOR reduction expired) |
| Georgia | 5.19% | Reduced from 5.39% mid-2025; targeting 5.09% in 2026 (pending revenue) |
| Idaho | 5.695% | Reduced from 5.8% in 2024 |
| Illinois | 4.95% | Constitutionally required to be flat; no changes scheduled |
| Indiana | 2.95% | ↓ from 3.0% in 2026; drops to 2.9% in 2027, targeting 2.55% by 2030+ |
| Iowa | 3.80% | Converted to flat in 2025; further reductions possible |
| Kentucky | 3.50% | ↓ from 4.0% in 2026; further annual reductions possible to 0% |
| Louisiana | 3.00% | Major reform 2025; reduced from top 4.25% |
| Michigan | 4.25% | No changes scheduled |
| Mississippi | 4.00% | ↓ from 4.4% in 2026; phasing to 3% by 2030, targeting 0% thereafter |
| North Carolina | 3.99% | ↓ from 4.25% in 2026 (final step); further 0.5% cuts possible 2027–2034 |
| Ohio | 2.75% | ↓ New flat rate 2026 on income above $26,050; converted from graduated |
| Pennsylvania | 3.07% | One of the oldest unchanged flat rates; no reductions scheduled |
| Utah | 4.55% | Reduced from 4.65% in 2024 |
Trend: The movement toward flat taxes continues to accelerate. Eight states cut individual income tax rates effective January 1, 2026, and multiple states (MS, KY, GA, IN, NC) have legislated phasedowns toward 0% if revenue triggers are met. Ohio's 2026 conversion brings the flat-tax count to 15 states. Georgia is targeting full income tax elimination by the early 2030s if economic conditions permit.
Graduated Tax States
Twenty-seven states plus D.C. use graduated (progressive) tax systems with multiple brackets, ranging from 2 brackets (Kansas) to 12 (Hawaii). Higher incomes are taxed at higher marginal rates. Ohio moved to a flat rate in 2026, reducing this group by one. Notable 2026 changes within graduated states: Nebraska top rate dropped to 4.55% (from 5.2%), Montana top rate dropped to 5.65% (from 5.9%), and Oklahoma simplified to 3 brackets with a 4.5% top rate (from 4.75%).
Top Marginal Rates by State (2026, 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. Nebraska, Montana, and Oklahoma have 2026 rate changes — see the 2026 Rate Changes callout in the Overview section above.
Retirement income treatment varies by state. Many states that appear high-tax on paper offer significant exemptions for retirees:
- Social Security fully exempt: AL, AZ, AR, CA, DE, GA, HI, ID, IL, IN, IA, KY, LA, ME, MD, MA, MI, MS, NJ, NY, NC, OH, OK, OR, PA, SC, VA, WI
- Pension / 401(k) / IRA fully exempt: IL, MS, PA (and partial exemptions in many others)
- Military retirement fully exempt: Many states; check your state's DoR for current rules
Retirees should evaluate effective tax burden — not just the top marginal rate — when comparing states.
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 — 2026 State Individual Income Tax Rates and Brackets
- 2.Tax Foundation — 2025 State Individual Income Tax Rates and Brackets
- 3.Tax Foundation — Facts & Figures 2025: How Does Your State Compare?
- 4.IRS — State Government Websites (Tax Forms & Info)
- 5.Washington Dept. of Revenue — Capital Gains Tax (Tiered Rates 2025)
- 6.Georgia Dept. of Revenue — 2025 Tax Updates (HB 111, 5.19% Rate)
- 7.Venable LLP — Final OBBBA Temporarily Expands SALT Cap
- 8.Ohio HB 96 — 2026 Budget Bill (Flat Tax Conversion)
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.