Location is everything if you want to save a few income tax dollars. Overall, state tax rates range from 0% to more than 13% as of 2021.
California, Hawaii, New York, New Jersey, and Oregon have some of the highest state income tax rates in the country and eight states have no tax on earned income at all. Another 10 have a flat tax rate—everyone pays the same percentage regardless of how much they earn.
Learn which states have the highest tax rates, no taxes, and flat taxes; and see a complete list of tax rates for every state in the union.
2021 Top Income Tax Rates by State
Below, you'll find the top 10 states with the highest income tax rates.
|State||Top Income Tax Rate|
California tops the list with the highest income tax rates in the country—its highest tax rate is 12.3%, but it also implements an additional tax on those with income of $1 million or more, which makes its highest actual tax rate 13.3%. New Jersey and New York also implement this type of "millionaire's tax." Other states have a top tax rate, but not all states have the same number of income brackets leading up to the top rate. For example, Hawaii has a top tax rate of 11% and 12 income brackets, while Iowa has a top tax rate of 8,53% and nine income brackets. And of course, Washington, D.C. is not a state, but it has its own income tax rate.
States Without Income Tax
On the flip side, Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington state, and Wyoming don’t impose an income tax at all. New Hampshire falls into a gray area. It doesn't levy a tax on earned income, but it does tax interest and dividends at a flat 5%.
Since they don't collect income tax, some states generate revenue in other ways. Tennessee has one of the highest combined state and local sales tax rates in the country. Your paycheck might be safe, but you'll be dinged at the cash register. New Hampshire and Texas have high property taxes in relation to home values. And Pennsylvania charged the highest tax on gasoline in 2021.
States With Flat Tax Rates
Among the states that do have income taxes, many residents get a break because the highest rates don't kick in until upper-income levels. But this isn't the case in the 10 states that have flat tax rates as of 2021. The flat-tax states and their rates, from highest to lowest, can be seen in the table below.
|State||2021 Flat Tax Rate|
|New Hampshire||5% (interest and dividend income only)|
A State-by-State Comparison of Income Tax Rates
The remaining states and Washington D.C. charge a "progressive" tax on all income, based on tax brackets. The more you earn, the higher the percentage you'll pay in income tax on your top dollars. For example, California's top rate is 13.3%, but you'll only pay this on income over $1 million.
The rates and income thresholds for individuals filing single for tax year 2021, including those states that have no income tax and those who tax at a flat rate, are:
|State||Tax Rates||Lowest and Highest Income Brackets|
|Alabama||2% to 5%||$500 and $3,001|
|Arizona||2.59% to 8%||$27,272 and $250,000|
|Arkansas||2% to 5.9%||$4,000 and $79,300|
|California||1% to 13.3%||$8,932 and $1 million|
|Colorado||4.55%||Flat rate applies to all incomes|
|Connecticut||3% to 6.99%||$10,000 and $500,000|
|Delaware||0% to 6.6%||$2,000 and $60,001|
|Georgia||1% to 5.75%||$750 and $7,001|
|Hawaii||1.4% to 11%||$2,400 and $200,000|
|Idaho||1.125% to 6.925%||$1,568 and $11,760|
|Illinois||4.95%||Flat rate applies to all incomes|
|Indiana||3.23%||Flat rate applies to all incomes|
|Iowa||0.33% to 8.53%||$1,676 and $75,420|
|Kansas||3.1% to 5.7%||$15,000 and $30,000|
|Kentucky||5%||Flat rate applies to all incomes|
|Louisiana||2% to 6%||$12,500 and $50,001|
|Maine||5.8% to 7.15%||$22,450 and $53,150|
|Maryland||2% to 5.75%||$1,000 and $250,000|
|Massachusetts||5%||Flat rate applies to all incomes|
|Michigan||4.25%||Flat rate applies to all incomes|
|Minnesota||5.35% to 9.85%||$27,230 and $166,041|
|Mississippi||3% to 5%||$5,000 and $10,001|
|Missouri||1.5% to 5.4%||$1,088 and $8,704|
|Montana||1% to 6.9%||$3,100 and $18,800|
|Nebraska||2.46% to 6.84%||$3,340 and $32,210|
|New Hampshire||5%||Flat rate on interest and dividend income|
|New Jersey||1.4% to 10.75%||$20,000 and $1 million|
|New Mexico||1.7% to 5.9%||$5,500 and $210,000|
|New York||4% to 10.9%||$8,500 and $25 million|
|North Carolina||5.25%||Flat rate applies to all incomes|
|North Dakota||1.1% to 2.9%||$40,525 and $445,000|
|Ohio||0% to 4.797%||$22,150 and $221,300|
|Oklahoma||0.5% to 5%||$1,000 and $7,200|
|Oregon||4.75% to 9.9%||$3,650 and $125,000|
|Pennsylvania||3.07%||Flat rate applies to all incomes|
|Rhode Island||3.75% to 5.99%||$66,200 and $150,550|
|South Carolina||0% to 7%||$3,110 and $15,560|
|Utah||4.95%||Flat rate applies to all incomes|
|Vermont||3.35% to 8.75%||$40,350 and $204,000|
|Virginia||2% to 5.75%||$3,000 and $17,001|
|Washington D.C.||4% to 8.95%||$10,000 and $1 million|
|West Virginia||3% to 6.5%||$10,000 and $60,000|
|Wisconsin||3.54% to 7.65%||$12,120 and $266,930|
State Tax Changes for 2021
Tax laws can change at any time as legislation is passed or repealed. The below came into effect for tax year 2021.
- Arizona: An individual income tax surcharge of 3.5% was put in effect for taxpayers with marginal income above $250,000 (single filers) or $500,000 (joint filers).
- Arkansas: Top rate dropped from 6.6% to 5.9%.
- Colorado: A permanent reduction of Colorado’s flat individual and corporate income tax rates changed it from 4.63% to 4.55%.
- Tennessee: The Hall Tax was completely phased out.
- New Mexico: The top marginal individual income tax rate was permanently increased from 4.9% to 5.9% with the addition of a new bracket.
- New York: In April 2021, New York's highest tax rate changed with the passage of the 2021–2022 budget. The previous 8.82% rate was increased to three graduated rates of 9.65%, 10.3%, and 10.9%. All these rates apply to incomes over $2 million, with the highest rate of 10.90% applying to incomes over $25 million. In 2028, these rates are scheduled to revert to the pre-2021 rate.
Frequently Asked Questions (FAQs)
How is state income tax money used?
Tax revenue is used according to state budgets. The budgeting process differs by state, but in general, it mirrors the federal process of legislative and executive branches coming to a spending agreement.
Where do you pay income tax for out-of-state work?
You should always expect to file income taxes in the state where you live. If you cross state lines for your job, you may or may not have to file taxes in another state, too. Some states have agreements that allow workers to only file taxes where they live, regardless of where they work. Check with a tax professional to learn how state laws may apply to your situation.
Tax Foundation. "State Individual Income Tax Rates and Brackets for 2021." Accessed Dec. 17, 2021.
California Franchise Tax Board. "2021, 540, California Tax Rate Schedules." Accessed Dec. 17, 2021.
State of New Jersey, Office of the Governor. "Governor Murphy, Lt. Governor Oliver, Senate President Sweeney, Assembly Speaker Coughlin, Assembly Budget Chair Pintor Marin, and Senate Budget Chair Sarlo Announce Agreement to Include Millionaire’s Tax in Revised FY2021 Budget." Accessed Dec. 17, 2021.
New York State Assembly. "A03009 Summary: Bill No A03009C - Part A." Accessed Dec. 17, 2021.
Federation of Tax Administrators. "State Individual Income Taxes." Accessed Dec. 17, 2021.
Tennessee Department of Revenue. "Sales and Use Tax." Accessed Dec. 17, 2021.
Tax Foundation. "How High Are Property Taxes in Your State?" Accessed Dec. 17, 2021.
U.S. Energy Information Administration. "State Gasoline Taxes Average About 30 Cents Per Gallon." Accessed Dec. 17, 2021.