State Income Taxes: What States have the Highest and Lowest Income Taxes?

Last Updated on January 28, 2022 by Mark Ferguson



Not every state in the US has the same state income taxes! Many states have zero income taxes (Texas) while others have extremely high income taxes (California)! It is not just income taxes that vary by state. Different states have different property tax rates, different vehicle tax rates, different sales tax rates, and more. Income taxes can have a huge impact on the money you keep, especially if you are a high earner. This is why you often see very wealthy people move to states with low or no income taxes. We have put together a comprehensive list of the property taxes in each state, which can be really simple in some cases or really complicated in others. 

One important thing to note however is how exactly graduated-rate state income taxes work. A common misconception is that once your income reaches the next bracket, your entire income will be taxed at a higher rate. This is not the case. Only the money you make above the threshold will be taxed at the higher rate.

If you would like to see the property tax rates in each state check this out.

States with No State Income Tax

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

States with Flat-Rate State Income Tax

  • Colorado – 4.55%
  • Illinois – 4.95%
  • Indiana – 3.23%
  • Kentucky – 5%
  • Massachusetts – 5%
  • Michigan – 4.25%
  • New Hampshire – 5%
    • Only applies to dividends and interest
  • North Carolina – 5.25%
  • Pennsylvania – 3.07%
  • Utah – 4.95%

States with Graduated-Rate State Income Tax

Alabama

BracketRate
0-$5002%
$500-$30004%
>$30005%

Arizona

BracketRate
0-$27,2722.59%
$27,272-$54,5443.34%
$54,544-$163,6324.17%
$163,632-$250,0004.5%
>$250,0008%

Arkansas

BracketRate
0-$40002%
$4000-$80004%
>$80005.9%

California

BracketRate
0-$8,9321%
$8,932-$21,1752%
$21,175-$33,4214%
$33,421-$46,3946%
$46,394-$58,6348%
$58,634-$299,5089.3%
$299,508-$359,40710.3%
$359,407-$599,01211.3%
$599,012-$1,000,00012.3%
>$1,000,00013.3%

Connecticut

BracketRate
0-$10,0003%
$10,000-$50,0005%
$50,000-$100,0005.5%
$100,000-$200,0006%
$200,000-$250,0006.5%
$250,000-$500,0006.9%
>$500,0006.99%

Delaware

BracketRate
$2,000-$5,0002.2%
$5,000-$10,0003.9%
$10,000-$20,0004.8%
$20,000-$25,0005.2%
$25,000-$60,0005.55%
>$60,0006.6%

Georgia

BracketRate
0-$7501%
$750-$2,2502%
$2,250-$3,7503%
$3,750-$5,2504%
$5,250-$7,0005%
>$7,0005.75%

Hawaii

BracketRate
0-$2,4001.4%
$2,400-$4,8003.2%
$4,800-$9,6005.5%
$9,600-$14,4006.4%
$14,400-$19,2006.8%
$19,200-$24,0007.2%
$24,000-$36,0007.6%
$36,000-$48,0007.9%
$48,000-$150,0008.25%
$150,000-$175,0009%
$175,000-$200,00010%
>$200,00011%

Idaho

BracketRate
0-$1,5681.125%
$1,568-$3,1363.125%
$3,136-$4,7043.625%
$4,704-$6,2724.6255
$6,272-$7,8405.625%
$7,840-$11,7606.625%
>$11,7606.925%

Iowa

BracketRate
0-$1,6760.33%
$1,676-$3,3520.67%
$3,352-$6,7042.25%
$6,704-$15,0844.14%
$15,084-$25,1405.63%
$25,140-$33,5205.96%
$33,520-$50,2806.25%
$50,280-$75,4207.44%
>$75,4208.53%

Kansas

BracketRate
0-$15,0003.1%
$15,000-$30,0005.25%
>$30,0005.7%

Louisiana

BracketRate
0-$12,5002%
$12,500-$50,0004%
>$50,0006%

Maine

BracketRate
0-$22,4505.8%
$22,450-$53,1506.75%
>$53,1507.15%

Maryland

BracketRate
0-$1,0002%
$1,000-$2,0003%
$2,000-$3,0004%
$3,000-$100,0004.75%
$100,000-$125,0005%
$125,000-$150,0005.25%
$150,000-$250,0005.5%
>$250,0005.75%

Minnesota

BracketRate
0-$27,2305.35%
$27,230-$89,4406.8%
$89,440-$166,0407.85%
>$166,0409.85%

Mississippi

BracketRate
$4,000-$5,0003%
$5,000-$10,0004%
>$10,0005%

Missouri

BracketRate
$107-$1,0731.5%
$1,073-$2,1462%
$2,146-$3,2192.5%
$3,219-$4,2923%
$4,292-$5,3653.5%
$5,365-$6,4384%
$6,438-$7,5114.5%
$7,511-$8,5845%
>$8,5845.4%

Montana

BracketRate
0-$3,1001%
$3,100-$5,5002%
$5,500-$8,4003%
$8,400-$11,3004%
$11,300-$14,5005%
$14,500-$18,7006%
>$18,7006.9%

Nebraska

BracketRate
0-$3,3402.46%
$3,340-$19,9903.51%
$19,990-$32,2105.01%
>$32,2106.84%

New Jersey

BracketRate
0-$20,0001.4%
$20,000-$35,0001.75%
$35,000-$40,0003.5%
$40,000-$75,0005.525%
$75,000-$500,0006.37%
$500,000-$1,000,0008.97%
>$1,000,00010.75%

New Mexico

BracketRate
0-$5,5001.7%
$5,500-$11,0003.2%
$11,000-$16,0004.7%
$16,000-$210,0004.9%
>$210,0005.9%

New York

BracketRate
0-$8,5004%
$8,500-$11,7004.5%
$11,700-$13,9005.25%
$13,900-$21,4005.9%
$21,400-$80,6505.97%
$80,650-$215,4006.33%
$215,400-$1,077,5506.85%
>$1,077,5508.82%

North Dakota

BracketRate
0-$40,1251.1%
$40,125-$97,1502.04%
$97,150-$202,6502.27
$202,650-$440,6002.64%
>$440,6002.9%

Ohio

BracketRate
$22,150-$44,2502.85%
$44,250-$88,4503.326%
$88,450-$110,6503.802%
$110,650-$221,3004.413%
>$221,3004.797%

Oklahoma

BracketRate
0-$1,0000.5%
$1,000-$2,5001%
$2,500-$3,7502%
$3,750-$4,9003%
$4,900-$7,2004%
>$7,2005%

Oregon

BracketRate
0-$3,6504.75%
$3,650-$9,2006.75%
$9,200-$125,0008.75%
>$125,0009.9%

Rhode Island

BracketRate
0-$66,2003.75%
$66,200-$150,5504.75%
>$150,5505.99%

South Carolina

BracketRate
$3,070-$6,1503%
$6,150-$9,2304%
$9,230-$12,3105%
$12,310-$15,4006%
>$15,4007%

Vermont

BracketRate
0-$40,3503.35%
$40,350-$97,8006.6%
$97,800-$204,0007.6%
>$204,0008.75%

Virginia

BracketRate
0-$3,0002%
$3,000-$5,0003%
$5,000-$17,0005%
>$17,0005.75%

West Virginia

BracketRate
0-$10,0003%
$10,000-$25,0004%
$25,000-$40,0004.5%
$40,000-$60,0006%
>$60,0006.5%

Wisconsin

BracketRate
0-$12,1203.54%
$12,120-$24,2504.65%
$24,250-$266,9306.27%
>$266,9307.65%

District of Colombia

BracketRate
0-$10,0004%
$10,000-$40,0006%
$40,000-$60,0006.5%
$60,000-$350,0008.5%
$350,000-$1,000,0008.75%
>$1,000,0008.95%

Based off the report from the Tax Foundation.

Lowest to highest income tax based on median household income ($62,843 from 2015-2019 – US Census Bureau)

RankStateIncome Tax
1North Dakota2.04%
2Pennsylvania3.07%
3Indiana3.23%
4Ohio3.326%
5Rhode Island3.75%
6Arizona4.17%
7Michigan4.25%
8Colorado4.55%
9Maryland4.75%
10New Mexico4.9%
11Illinois4.95%
12Utah4.95%
13Alabama5%
14New Hampshire5%
15Kentucky5%
16Oklahoma5%
17Massachusetts5%
18Mississippi5%
19North Carolina5.25%
20New Jersey5.525%
21Missouri5.4%
22Connecticut5.5%
23Kansas5.7%
24Georgia5.75%
25Virginia5.75%
26Arkansas5.9%
27New York5.97%
28Louisiana6%
29Wisconsin6.27%
30West Virginia6.5%
31Delaware6.6%
32Vermont6.6%
33Minnesota6.8%
34Nebraska6.84%
35Montana6.9%
36Idaho6.925%
37South Carolina7%
38Maine7.15%
39Iowa7.44%
40Hawaii8.25%
41D.C.8.5%
42Oregon8.75%
43California9.3%

It is also important to note that alongside state income taxes, there are also federally mandated income taxes which are the same no matter what state you are in. If you are interested in learning more about getting started in real estate investing and how it ties into income taxes, click here.

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