Your Guide to State Income Tax Rates

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, Oregon, Minnesota, New York, and New Jersey have some of the highest state income tax rates in the country and eight states have no tax on earned income at all. Another ten 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

California tops the list with the highest tax rates in the country—its highest tax rate is 13.30%, a full 2.3% more than Hawaii, the runner-up for the highest tax rate with 11.00%. California applies its highest tax rate to those who earn more than $1 million. 

Rounding out the top-10 states with the highest tax rates are:

• New York: 10.90%
• New Jersey: 10.75%
• Oregon: 9.90%
• Minnesota: 9.85%
• District of Columbia: 8.95%
• Vermont: 8.75%
• Iowa: 8.53%
• Wisconsin: 7.65%

States Without Income Tax

On the flip side, Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, and Tennessee 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 5%.

Some states generate revenue in other ways, though:

• 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.
• 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 ten states that have flat tax rates as of 2021. The flat-tax states and their rates, from highest to lowest, are:

• North Carolina: 5.25%
• Massachusetts: 5.00%
• Kentucky: 5.00%
• New Hampshire: 5.00% (only on dividend and interest income)
• Illinois: 4.95%
• Utah: 4.95%
• Colorado: 4.55%
• Michigan: 4.25%
• Indiana: 3.23%
• Pennsylvania: 3.07% 

A State-by-State Comparison of Income Tax Rates

The remaining states and the District of Columbia 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 in 2021, including those states that have no income tax and those who tax at a flat rate, are:

• Alabama: 2% to 5%, the highest rate applying to incomes over $3,000 
• Alaska: No income tax
• Arizona: 2.59% to 8%, the highest rate applying to incomes over $250,000
• Arkansas: 2% to 5.9%, the highest rate applying to incomes over $8,000 
• California: 1:% to 13.30%, the highest rate applying to incomes over $1,000,000
• Colorado: A flat rate of 4.55% of federal taxable income with modifications
• Connecticut: 3% to 6.99%, the highest rate applying to incomes over $500,000
• Delaware: 2.20% to 6.60%, the highest rate applying to incomes over $60,000
• Florida: No income tax
• Georgia: 1% to 5.75%, the highest rate applying to incomes over $7,000
• Hawaii: 1.40% to 11%, the highest rate applying to incomes over $200,000 
• Idaho: 1.125% to 6.925%, the highest rate applying to incomes over $11,760
• Illinois: A flat rate of 4.95%
• Indiana: A flat rate of 3.23%
• Iowa: 0.33% to 8.53%, the highest rate applying to incomes over $75,420
• Kansas: 3.10% to 5.70%, the highest rate applying to incomes over $30,000
• Kentucky: A flat rate of 5%
• Louisiana: 2% to 6%, the highest rate applying to incomes over $50,000
• Maine: 5.80% to 7.15%, the highest rate applying to incomes over $53,150 
• Maryland: 2% to 5.75%, the highest rate applying to incomes over $250,000 
• Massachusetts: A flat rate of 5%
• Michigan: A flat rate of 4.25%
• Minnesota: 5.35% to 9.85%, the highest rate applying to incomes over $166,040 
• Mississippi: 3% to 5%, the highest rate applying to incomes over $10,000
• Missouri: 1.5% to 5.40%, the highest rate applying to incomes over $8,584
• Montana: 1.0% to 6.90%, the highest rate applying to incomes over $18,700 
• Nebraska: 2.46% to 6.84%, the highest rate applying to incomes over $32,210
• Nevada: No income tax
• New Hampshire: A flat rate of 5% on dividends and interest income
• New Jersey: 1.40% to 10.75%, the highest rate applying to incomes over $1 million
• New Mexico: 1.70% to 5.90%, the highest rate applying to incomes over $210,000
• New York: 4% to 10.9%, the highest rate applying to incomes over $25 million 
• North Carolina: A flat rate of 5.25%
• North Dakota: 1.10% to 2.90%, the highest rate applying to incomes over $440,600
• Ohio: 2.85% to 4.797%, the highest rate applying to incomes over $221,300
• Oklahoma: 0.50% to 5%, the highest rate applying to incomes over $7,200
• Oregon: 4.75% to 9.90%, the highest rate applying to incomes over $125,000
• Pennsylvania: A flat rate of 3.07%
• Rhode Island: 3.75% to 5.99%, the highest rate applies to incomes over $150,550
• South Carolina: 0% to 7%, the highest rate applies to incomes over $15,400
• South Dakota: No income tax
• Tennessee: No income tax
• Texas: No income tax
• Utah: A flat rate of 4.95%
• Vermont: 3.35% to 8.75%, the highest rate applies to incomes over $204,000
• Virginia: 2% to 5.75%, the highest rate applies to incomes over $17,000
• Washington: No income tax
• West Virginia: 3% to 6.50%, the highest rate applies to incomes over $60,000
• Wisconsin: 3.54% to 7.65%, the highest rate applies to incomes over $266,930
• Wyoming: No income tax
• District of Columbia: 4% to 8.95%, the highest rate applies to incomes over $1 million

State Tax Changes for 2021

Tax laws can change at any time as legislation is passed or repealed. The following changes are effective for the 2021 tax season:

• Arizona: Individual income tax surcharge of 3.5 percent for taxpayers with marginal income above $250,000 (single filers) or $500,000 (joint filers).
• Arkansas: Top rate dropped from 6.60% to 5.90%
• Colorado: Permanent reduction of Colorado’s flat individual and corporate income tax rates from 4.63 to 4.55 percent, retroactive to the beginning of tax year 2020
• Tennessee: The Hall Tax has been completely phased out and will not be levied beginning in 2021.
• New Mexico: The top marginal individual income tax rate has 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%, 10.30%, and 10.90%. 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.