State Income Tax Rates Explained
The federal government income tax collected by the IRS applies to all Americans regardless of where you live, but the rules for state income tax rates and how you pay taxes can be vastly different from those of the IRS depending on your state’s income tax structure. State income tax systems fall into three broad categories: fixed or flat income taxes, progressive income taxes, and no income taxes.
Be Prepared: All the New Numbers You Need To Know for Planning Ahead on Taxes
Fixed rates or flat rates, as the name implies, have a single tax bracket regardless of how much you make. Progressive income tax, the most commonly used system, refers to tax rates that increase incrementally for people with more taxable income. Some states, like Alaska and Florida, have high sales tax or property taxes to compensate for the fact that they are among the few states with no income tax.
Here’s what you need to know about state income tax rates, including states with no income tax.
States With Flat Tax Rates
With flat tax rates, you pay the same tax rate no matter how much income you have. Many states have moved away from flat-tax structures because critics claim that they unfairly burden low- and middle-class taxpayers. Illinois, however, which imposes a 4.95% fixed tax, has a flat tax because when the tax was first implemented, it was unclear whether a progressive income tax was constitutional under the state constitution, and the law hasn’t been changed since then.
Here are the states that impose a flat tax rate on their citizens:
State | Single Filer Rates | Married Jointly Rates |
Colorado | 4.63% | 4.63% |
Illinois | 4.95% | 4.95% |
Indiana | 3.23% | 3.23% |
Kentucky | 5.00% | 5.00% |
Massachusetts | 5,00% | 5.00% |
Michigan | 4.25% | 4.25% |
New Hampshire | 0% on W-2 income, 5.00% on dividends and interest | 0% on W-2 income, 5.00% on dividends and interest |
North Carolina | 5.25% | 5.25% |
Pennsylvania | 3.07% | 3.07% |
Tennessee | 1.00% (0% for tax year 2021) | 1.00% (0% for tax year 2021) |
Utah | 4.95% | 4.95% |
Source: State tax websites | ||
States With Progressive Tax Rates
With progressive tax rates, most states have separate tax brackets that depend on how much you earn. The idea is that people in higher income brackets can afford to pay more taxes. More brackets can lead to more complexity.
Some states have just a few brackets, like Alabama or Rhode Island, which have just three each. California and Missouri both tip the scales with 10 different tax rates. And sometimes a state’s tax brackets are as easy as 1, 2, 3, like Montana, where the first five tax brackets are 1 percent, 2 percent, 3 percent, 4 percent and 5 percent.
In other states, tax bracketing looks like budgeting to the penny. Take Arizona, for example, which has tax brackets at an exacting 2.59 percent, 2.88 percent, 3.36 percent, 4.24 percent and 4.54 percent.
Here are the standard tax brackets for the states with progressive income tax rates:
State | Single Filer Rates | Married Jointly Rates |
Alabama | 2.00% = $0-$500 | 2.00% = $0-$1,000 |
4.00% = $501-$3,000 | 4.00% = $1,000-5,999 | |
5.00% > $3,000 | 5.00% > $6,000 | |
Arizona | 2.59%-3.34% = $0-$53,000 | 2.59%-3.34% = $0-$106,000 |
4.17% = $53,001 – $159,000 | 4.17% = $106,001 – $318,000 | |
4.50% > $159,000 | 4.50% > $318,000 | |
Arkansas | 0.00%-3.40% = $0-$22,200 | 0.00%-3.40% = $0-$22,200 |
0.75% – 6.00% = $22,200 – $79,300 | 0.75% – 6.00% = $22,200 – $79,300 | |
2.00% – 6.60% > $79,300 | 2.00% – 6.60% > $79,300 | |
California | 1.00%-4.00% = $0-$33,421 | 1.00%-4.00% = $0-$66,842 |
6.00%-10.30% = $33,421-$359,407 | 8.00%-10.30% = $66,842-$718,814 | |
11.30%-12.30% > $359,407 | 11.30%-13.30% > $718,814 | |
Connecticut | 3.00%-5.50% = $0-$100,000 | 3.00%-5.50% = $0-$200,000 |
6.00%-6.90% = $100,000- 500,000 | 6.00%-6.90% = $200,000- 1,000,000 | |
6.99% > $500,000 | 6.99% > $1,000,000 | |
Delaware | 0%-4.80% = $2,000-$19,999 | 2.20%-4.80% = $2,000-$19,999 |
5.20%-5.55% = $20,000-$59,999 | 5.20%-5.55% = $20,000-$59,999 | |
6.60% > $60,000 | 6.60% >$60,000 | |
District of Columbia | 4.00%-6.50% = $0-$60,000 | 4.00%-6.50% = $0-$60,000 |
8.50% =$60,001-$350,000 | 8.50% =$60,001-$350,000 | |
8.75%-8.95% = $350,001-$999,999 | 8.75%-8.95% = $350,001-$999,999 | |
8.95% > $1,000,000 | 8.95% > $1,000,000 | |
Georgia | 1.00%-3.00% = $0-$3,750 | 1.00%-3.00% = $0-$5,000 |
4.00%-5.00% = $3,751-$7,000 | 4.00%-5.00% = $5,001-$10,000 | |
5.75% > $7,000 | 5.75% > $10,000 | |
Hawaii | 1.40%-6.40% = $0-$14,400 | 1.40%-6.40% = $0-$28,800 |
6.80%-7.90% = $14,401-$48,000 | 6.80%-7.90% = $28,800-$96,000 | |
8.25%-10.00% = $48,001-$200,000 | 8.25%-10.00% = $96,000-$400,000 | |
11.00% > $200,000 | 11.00% > $400,000 | |
Idaho | 1.125%-4.625% = $0-$6,162 | 1.125%-4.625% = $0-$12,324 |
5.625%-6.625% = $6,163-$11,554 | 5.625%-6.625% = $12,325-$23,108 | |
6.925% > $11,554 | 6.925% > $11,554 | |
Iowa | 0.33%-6.25% = $0-$50,280 | 0.33%-6.25% = $0-$50,280 |
6.48%-7.44% = $50,280-$75,420 | 6.48%-7.44% = $50,280-$75,420 | |
8.53% > $75,420 | 8.98% > $75,420 | |
Kansas | 3.10% = $0-$15,000 | 3.10% = $0-$30,000 |
5.25% = $15,001-$30,000 | 5.25% = $30,001-$60,000 | |
5.70% > $60,000 | 5.70% > $60,000 | |
Louisiana | 2.00% = $0-$12,500 | 2.00% = $0-$25,000 |
4.00% = $12,501 – $50,000 | 4.00% = $25,001-$100,000 | |
6.00% > $50,000 | 6.00% > $100,000 | |
Maine | 5.80% = $0-$22,200 | 5.80% = $0-$44,450 |
6.75% = $22,201-$52,600 | 6.75% = $44,451-$105,200 | |
7.15% > $52,600 | 7.15% > $105,200 | |
Maryland | 2.00%-4.75% = $0-$100,000 | 2.00%-4.75% = $0-$150,000 |
5.00%-5.50% = $100,001-$250,000 | 5.00%-5.50% = $150,001-$300,000 | |
5.75% > $250,000 | 5.75% > $300,000 | |
Minnesota | 5.35% = $0-$26,960 | 5.35% = $0-$39,410 |
6.80%-7.85% = $26,961-$164,400 | 6.80%-7.85% = $39,411-$273,470 | |
9.85% > $164,400 | 7.85%-9.85% > $273,470 | |
Mississippi | 3.00% = $3,000-$5,000 | 3.00% = $3,000-$5,000 |
4.00% = $5,001-$10,000 | 4.00% = $5,001-$10,000 | |
5.00% > $10,000 | 5.00% > $10,000 | |
Missouri | 1.50%-3.00% = $0-$4,212 | 1.50%-3.00% = $0-$4,212 |
3.50%-5.00% = $4,213-$8,424 | 3.50%-5.00% = $4,213-$8,424 | |
5.40% > $8,424 | 5.40% > $8,424 | |
Montana | 1.00%-3.00% = $0-$8,200 | 1.00%-3.00% = $0-$8,200 |
4.00%-6.00% = $8,201-$18,400 | 4.00%-6.00% = $8,201-$18,400 | |
6.90% > $18,400 | 6.90% > $18,400 | |
Nebraska | 2.46% = $0-$3,290 | 2.46% = $0-$6,570 |
3.51% = $3,291-$19,700 | 3.51% = $6,571-$39,410 | |
5.01% = $19,701-$31,750 | 5.01%-6.84% = $39,411-$63,500 | |
6.84% > $31,750 | 6.84% > $63,500 | |
New Jersey | 1.40% = $0-$20,000 | 1.40% = $0-$20,000 |
1.75%-5.525% = $20,001-$75,000 | 1.75%-5.525% = $20,001-$80,000 | |
6.37%-8.97% > $75,001-$5,000,000 | 6.37%-8.97% > $80,001-$5,000,000 | |
10.75% > $5,000,000 | 10.75% > $5,000,000 | |
New Mexico | 1.70% = $0-$5,500 | 1.70% = $0-$8,000 |
3.20% = $5,501-$11,000 | 3.20% = $8,001-$16,000 | |
4.70% = $11,001-$16,000 | 4.70% = $16,001-$24,000 | |
4.90% > $16,000 | 4.90% > $24,000 | |
New York | 4.00%-6.49% = $0-$215,400 | 4.00%-6.49% = $0-$161,550 |
6.85% = $215,401-$1,077,550 | 6.85% = $161,551-$2,155,350 | |
8.82% > $1,077,550 | 8.82% > $2,155,350 | |
North Dakota | 1.10% = $0-$39,450 | 1.10% = $0-$65,900 |
2.04%-2.27% = $>37,950-$199,250 | 2.04%-2.27% = $63,400-$242,550 | |
2.64% = $199,250-$433,200 | 2.64% = $242,551-$433,200 | |
2.90% > $433,200 | 2.90% > $433,200 | |
Ohio | 2.85%-3.802% = $21,751-$86,900 | 2.85%-3.802% = $21,751-$86,900 |
3.802%-4.413% = $86,901-$217,400 | 3.802%-4.413% = $86,901-$217,400 | |
4.797% > $217,400 | 4.797% > $217,400 | |
Oklahoma | 0.50%-1.00% = $0-$2,500 | 0.50%-1.00% = $0-$5,000 |
2.00%-4.00% = $2,501-$7,200 | 2.00%-4.00% = $5,001-$12,200 | |
5.00% > $7,200 | 5.00% > $12,200 | |
Oregon | 5.00% = $0-$3,550 | 5.00% = $0-$7,100 |
7.00%-9.00% = $3,551-$125,000 | 7.00%-9.00% = $7,101-$250,000 | |
9.90% > $125,000 | 9.90% > $250,000 | |
Rhode Island | 3.75% = $0-$65,250 | 3.75% = $0-$65,250 |
4.75% = $65,251-$148,350 | 4.75% = $65,251-$148,350 | |
5.99% > $148,350 | 5.99% > $148,350 | |
South Carolina | 0.00%-3.00% = $0-$6,150 | 0.00%-3.00% = $0-$6,150 |
4.00%-5.00% = $6,151-$12,310 | 4.00%-5.00% = $6,151-$12,310 | |
6.00% = $12,311-$15,400 | 6.00% = $12,311-$15,400 | |
7.00% > $15,400 | 7.00% > $15,400 | |
Vermont | 3.35% = $0-$39,600 | 3.35% = $0-$66,150 |
6.60%-7.60% = $39,601-$191,650 | 6.60%-7.60% = $66,151-$243,750 | |
8.75 > $191,650 | 8.75 > $243,750 | |
Virginia | 2.00%-3.00% = $0-$5,000 | 2.00%-3.00% = $0-$5,000 |
5.00% = $5,001-$17,000 | 5.00% = $5,001-$17,000 | |
5.75% > $17,000 | 5.75% > $17,000 | |
West Virginia | 3.00%-4.00% = $0-$25,000 | 3.00%-4.00% = $0-$25,000 |
4.50%-6.00% = $25,001-$60,000 | 4.50%-6.00% = $25,001-$60,000 | |
6.50% > $60,000 | 6.50% > $60,000 | |
Wisconsin | 4.00%-5.21% = $0-$23,930 | 4.00%-5.21% = $0-$31,910 |
6.27% = $23,931-$263,480 | 6.27% = $31,911-$351,310 | |
7.65% > $263,480 | 7.65% > $351,310 | |
Source: Tax Foundation, Individual State Tax Authorities | ||
States With No Income Tax
Out of the 50 U.S. states, only eight have no personal income tax for tax year 2020. Beginning in tax year 2021, however, Tennessee is slated to be the ninth when its hall tax is repealed — a move which will leave New Hampshire as the only state that charges a tax on interest and dividends.
Find Out: Sales Tax by State — Here’s How Much You’re Really Paying
Just because a state doesn’t charge income tax doesn’t mean citizens are off the hook from taxes. In fact, some of the taxes imposed by no-income-tax states might add up to be much higher than the same taxes imposed in other states. Or the state might charge taxes on items that aren’t taxed in other states.
Here are the current states that do not have an income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee (beginning tax year 2021)
Texas
Washington
Wyoming
Note that New Hampshire and Tennessee do levy taxes on dividend and interest income.
Before you pack your bags and to move to another state, it’s helpful to know its tax structure. Although a state might not impose an income tax, that doesn’t mean you won’t have to account for taxes in other ways. And the tax laws of some states might not be as friendly toward high earners, business owners or retirees.
More From GOBankingRates
Are You Spending More Than the Average American on 25 Everyday Items?
Guns and 32 Other Things You Definitely Do NOT Need To Buy During the Coronavirus Pandemic
John Csiszar contributed to the reporting for this article.
Last updated: Jan. 12, 2021
This article originally appeared on GOBankingRates.com: State Income Tax Rates Explained
