State income tax rates vary by state and by income level, and most states use a tax bracket system where you pay different percentages on different portions of your income
There is no single answer to how much state income tax you owe because the amount depends on three things: which state you live in, how much you earned, and whether your state uses a flat tax or a progressive bracket system. Nine states have no income tax at all. The remaining 41 states and Washington, D.C. charge between roughly 1 percent and 13 percent of your income, but the exact rate you pay depends on where your total income falls within that state's brackets.
Most states use a progressive tax bracket system, meaning you pay a lower percentage on your first dollars of income and a higher percentage as your income increases. For example, a state might tax the first $30,000 at 3 percent, the next $40,000 at 5 percent, and anything above $70,000 at 7 percent. You do not pay 7 percent on all your income—only on the portion that falls in the highest bracket. A smaller number of states use a flat tax, where everyone pays the same percentage regardless of income level.
Key Takeaways
- Nine states collect no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only dividends and interest).
- The remaining states charge between 1 and 13 percent, but the rate you actually pay depends on your income level and your state's bracket structure.
- Most states use progressive brackets, so you pay different rates on different portions of your income rather than one flat rate on everything.
- Your employer withholds state income tax from your paycheck based on a W-4 form you fill out, and you settle the actual amount owed when you file your state tax return.
- Some states offer deductions or credits that lower your taxable income or the tax you owe, and these vary significantly by state.
States with no income tax
Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming collect no state income tax on wages. New Hampshire also has no income tax on wages, but it does tax dividends and interest income at 5 percent.
People who live in these states pay no state income tax on their paychecks, but they typically pay higher sales taxes or property taxes to fund state services. If you move from a no-income-tax state to a state with income tax, or vice versa, your take-home pay will change even if your salary stays the same.
How progressive tax brackets work
In a progressive system, your income is divided into brackets, and each bracket has its own tax rate. The brackets reset each year and vary by filing status (single, married filing jointly, head of household). Here is a simplified example from a hypothetical state:
| Income Range | Tax Rate |
|---|---|
| $0 to $30,000 | 3% |
| $30,001 to $70,000 | 5% |
| $70,001 and above | 7% |
If you earned $60,000, you would owe: $30,000 × 3% = $900, plus $30,000 × 5% = $1,500, for a total of $2,400. Your effective tax rate (the percentage of your total income you actually pay) would be 4 percent, even though the top bracket is 7 percent. You only pay 7 percent on income that falls above $70,000.
Every state that uses brackets sets them differently, and they change each year to account for inflation. Your state's tax department publishes the current brackets, usually on their website or in the tax forms they send out.
Flat tax states
A smaller group of states uses a flat tax, where everyone pays the same percentage on all income regardless of how much they earn. Colorado, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Mississippi, Missouri, Montana, North Carolina, and Pennsylvania all use flat taxes. The rates range from about 2 percent to 5.75 percent depending on the state.
In a flat tax state, the math is simpler: if the rate is 4 percent and you earn $50,000, you owe $2,000. There are no brackets to calculate. However, flat tax states often still offer deductions or credits that reduce your taxable income or the tax you owe, so your effective rate may be lower than the stated flat rate.
How withholding and filing work
Your employer withholds state income tax from your paycheck based on the W-4 form you complete when you are hired. The W-4 asks about your filing status, dependents, and other income, and your employer uses that information to estimate how much tax to hold from each check. The amount withheld is an estimate—it may be more or less than what you actually owe.
When you file your state tax return (usually by April 15, the same deadline as federal taxes), you report your actual income and calculate the actual tax you owe. If too much was withheld, you receive a refund. If too little was withheld, you owe the difference. Most states allow you to file online through their tax department website or through tax software.
If you work in one state but live in another, or if you moved during the year, you may need to file part-year returns or non-resident returns in multiple states. The state where you worked may also require you to file, even if you do not live there. Your employer's payroll department can tell you which states they withhold for.
Deductions and credits that lower your tax
Most states allow you to deduct certain expenses or take credits that reduce the amount of tax you owe. Common deductions include the standard deduction (a set amount you can subtract from your income before calculating tax), mortgage interest, property taxes, and charitable donations. Credits are even more valuable because they reduce your tax dollar-for-dollar rather than just reducing your taxable income.
The deductions and credits available vary significantly by state. Some states mirror the federal tax code closely, while others have their own rules. For example, some states offer credits for child care expenses, education costs, or low-income workers. Your state's tax forms and instructions will list which deductions and credits you may be able to use.
Special situations: part-year residents and multiple states
If you moved to a different state during the tax year, you may owe income tax to both your old state and your new state. Most states tax you on income earned while you lived there, so you would file a part-year return in each state showing only the income from the months you lived there. Some states offer credits to prevent you from being taxed twice on the same income.
If you worked in one state but lived in another, the state where you worked may withhold tax, and the state where you lived may also require you to file. Many states have reciprocal agreements that prevent this double taxation, but not all do. Check with both states' tax departments if this situation applies to you.
Frequently Asked Questions
Do I have to file a state tax return if I did not earn much money?
It depends on your state and your income level. Each state sets a threshold below which you do not have to file. For example, some states require you to file only if you earned above a certain amount, while others require you to file if you had any tax withheld. Check your state's tax department website or your tax forms to find the threshold for your situation.
What is the difference between state and federal income tax?
Federal income tax goes to the U.S. government and funds national programs. State income tax goes to your state government and funds state programs like schools, roads, and public safety. They are calculated separately, and you file separate returns for each. Your employer withholds both from your paycheck.
Can I deduct federal taxes from my state income?
Most states do not allow you to deduct federal income tax paid. However, some states allow you to deduct state and local taxes (SALT) paid in previous years, or property taxes, or other specific expenses. Check your state's tax instructions to see what deductions are available.
What happens if I do not pay my state income tax?
Your state tax department can place a lien on your property, garnish your wages, or intercept your federal tax refund to cover unpaid state taxes. If you owe and cannot pay in full, contact your state's tax department about payment plans or hardship options.
How do I find out what my state's tax rate is?
Visit your state's tax department website (usually named "[State] Department of Revenue" or "[State] Tax Commission"). They publish current tax brackets, rates, and forms. You can also call their helpline or use tax software that shows your state's rates based on your income.