2025 State Income Tax Rates and Brackets

All earning residents get  5.1% deductions from their paychecks for income tax. The table below shows how each state’s individual income tax is structured. Compare states with no income tax, flat income taxes, or graduated-rate income tax. New Hampshire exclusively taxes dividend and interest income while Washington only taxes capital gains income. Most state governments in the United States collect a state income tax on all income earned within the state, which is different from and must be filed separately from the federal income tax.

State Individual Income Tax Rates and Brackets, 2022

Single tax filers with taxable income up to $27,272 (double if filing jointly) would have been taxed at a rate of 2.55 percent. Any taxable income exceeding that amount would have been taxed at a rate of 2.98 percent. Pending revenue triggers, the tax would eventually have been reduced to 2.5 percent, regardless of income level. However, enough signatures were gathered via petition that voters will now be asked to approve or reject the flat tax via ballot measure (Proposition 307) in the November 2022 election. In addition to IRS income tax rates and standard deductions, review and compare state related income tax rates, brackets, standard deductions, and exemptions. When you prepare your federal and state taxes on eFile.com, you do not have to worry about which tax rates your cash flow taxable income falls into or which deduction method is best for you.

Congress Must Cement Full R&D Tax Expensing for Economic Growth

If you want to compare all of the state tax rates on one page, visit the list of state income taxes. For info on 2011 federal income tax and federal tax refunds, visit the federal income tax and federal tax refund pages. State-local tax burdens of each of the 50 states’ residents as a share of income are clustered quite close to one another. This is logical considering state and local governments fund similar activities such as public education, transportation, prison systems, and health programs, often under the same federal mandates. Furthermore, tax competition between states can often make dramatic differences in the level of taxation between similar, nearby states unsustainable in the long run.

State Sales Tax Breadth and Reliance, Fiscal Year 2022

This amount is reduced to $500 per dependent for taxpayers with AGI above $20,000 and equal to or less than $100,000. For taxpayers with more state income tax rates than $100,000 in AGI, the dependent exemption is $300 per dependent. Since the country has 50 states,  a citizen can find it difficult to sort the details of income taxes to see which states levy the least amount of tax. While some states may enjoy paying minimal income taxes, they might actually be paying more taxes on other things, such as property or excise tax. If there is one takeaway from this list, it’s that it will help readers see where they can move to work if they want more net income from their gross salaries. The highest bracket for personal income tax for New Mexico is applicable to those who earn more than $16,000.

• Most states use the federal tax code as the starting point for their own income taxes, but states vary in their approaches to bringing in the federal standard deduction and (currently suspended) personal exemption.
• Table 2 lists the per capita dollar amounts of total tax burden and income that are divided to compute each state’s burden, as well as the breakdown of in-state and out-of-state payments for calendar year 2022.
• Such changes can have widespread effects on taxpayers across different income levels.
• Tax bracket calculators simplify bracket determinations by factoring in various elements.
• Proposition 208 (2020) had created a 3.5 percent high earners tax atop the state’s existing 4.5 percent top marginal income tax rate, functionally yielding a new top rate of 8 percent.
• 1, signed into law in February 2023, reduced Kentucky’s flat individual income tax rate from 4.5 percent in 2023 to 4.0 percent starting in 2024, codifying a reduction that was triggered under the conditions established by H.B.

380, Idaho’s top marginal individual income tax rate and third-lowest rate were both eliminated. The remaining rates were each reduced by 0.125 percentage points, except for the second-lowest rate, which was reduced by 0.025 percentage points. Iowa’s recent comprehensive tax reforms—adopted in 2018, 2021, and 2022—are continuing to phase in this year with the state’s top marginal corporate income tax rate decreasing from 8.4 percent in 2023 to 7.1 percent in 2024. Under current law, Iowa’s corporate rate will continue decreasing over time, subject to revenue availability, until it reaches a flat 5.5 percent. These rate reductions have contributed to a remarkable improvement in Iowa’s tax competitiveness.

• If you earn over $10,905, your income tax in Idaho will be 7.40% of your earnings.
• Numerous states have enacted corporate income tax rate changes over the past few years.
• Just like New Hampshire, Tennessee also doesn’t impose an income tax on wages.
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North Carolina

The main driver is state taxes on oil extraction (severance taxes and taxes on oil production and pipeline property). The burden of Alaska’s oil taxes does not fall predominantly on Alaska residents. Ignoring this fact and comparing Alaska tax collections directly to Alaska income makes the tax burden of Alaska residents look much higher than it actually is. Beyond the fact that tax burdens often ultimately borne by many people who do not directly remit them, taxes imposed by state and local governments are often borne—in both their legal and economic incidence—by nonresidents. When some share of the burden of a tax imposed in one state is borne by those who live elsewhere, this phenomenon is known as tax exporting. 436, which further consolidates Montana’s five tax brackets to four.11 Under the new law, which is retroactive to January 1, 2022, the 5.5 percent bracket was eliminated, and the second-lowest rate was reduced from 3.1 percent to 3.0 percent.

Its bracket of 4% to 8.82% in income tax rates means a deduction of $44.45 per $1,000 pre-tax dollars. Considering property and excise taxes as well, New York ranks first in the overall taxable income burden given to its residents. In March 2024, legislation was enacted reducing Utah’s individual and corporate income Legal E-Billing tax rates from 4.65 to 4.55 percent, retroactively effective as of January 1, 2024. 252, enacted in March 2024, New Mexico made notable changes to its tax bracket structure, primarily affecting low- and middle-income households. The future of federal income tax brackets is not set in stone. Legislative changes can alter tax rates and brackets significantly.

Although the majority of states have seen a decrease in tax burdens over time, 16 have experienced increases since 1977, many of these likely to be temporary upticks due to the pandemic. Connecticut taxpayers have seen the largest increase, of 3.3 percentage points, followed by Hawaii at 2.5 percent. This study assumes that much of the economic burden of severance taxes falls on oil industry investors rather than on Alaska taxpayers. Notably, this study does not assume that the burden substantially falls on consumers (including drivers who purchase motor fuel), since these prices are set by global energy markets. The same is true for states like North Dakota and Wyoming where, once this allocation is made, the aggregate tax burden falls from among the nation’s highest to the lowest.

The state of New Jersey only takes 1.40% of income tax for those who earn under $20,000. For those who earn above $500,000, the income tax is at 8.97%. On the overall tax burden, though, New Jersey places on the top 7. Choose any state from the list above for detailed state income tax information including 2025 income tax tables, state tax deductions, and state-specific income tax calculators. Many state pages also provide direct links to selected income tax return forms and other resources.