California has the highest top state income tax rate at 13.3 percent

California's top marginal income tax rate is 13.3 percent, the highest in the country. This rate applies to income above $680,000 for single filers and $1.36 million for married couples filing jointly (as of 2024). The rate was introduced in 2012 and has been adjusted for inflation each year since.

The second-highest top rate belongs to Hawaii at 11 percent, followed by New York at 10.9 percent. However, the top rate alone does not tell the full story — what matters for your actual tax bill is the income bracket where you fall and how the state's tax brackets are structured.

Key Takeaways

  • California's 13.3 percent top rate is the highest in the nation, but it only applies to income over $680,000 for single filers.
  • Most workers in California pay between 1 and 9.3 percent depending on their income level, not the top rate.
  • Hawaii and New York have the second and third-highest top rates at 11 and 10.9 percent respectively.
  • Nine states have no state income tax at all: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only dividends and interest).

How California's tax brackets work

California uses a progressive tax system with ten tax brackets. A single filer in 2024 pays 1 percent on the first $10,099 of income, 2 percent on income between $10,099 and $23,942, and the rate increases with each bracket until reaching 13.3 percent on income over $680,000. Each bracket is adjusted annually for inflation.

The key point: you do not pay 13.3 percent on all your income. You pay the lower rate on the lower brackets and only the highest rate on the portion of income that falls into the top bracket. A single filer earning $100,000 in California pays roughly 5.6 percent overall, not 13.3 percent.

Other states with high top rates

Hawaii's 11 percent top rate applies to income over $48,000 for single filers. New York's 10.9 percent rate applies to income over $1.09 million. Vermont, Oregon, and Minnesota all have top rates between 9.85 and 9.9 percent. These rates vary by state in both the threshold where they kick in and the number of brackets below them.

The effective tax rate — what you actually pay as a percentage of total income — depends on where your income falls within your state's brackets. Two people earning the same amount in different states can pay very different amounts in state income tax.

States with no income tax

Nine states impose no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire does not tax wages or salaries but does tax dividends and interest income at 5 percent.

States without income tax often fund government services through sales tax, property tax, or other revenue sources. Sales tax rates in these states tend to be higher than the national average to compensate.

How your state income tax compares to federal tax

State income tax is separate from federal income tax. You pay both. Federal tax rates range from 10 to 37 percent depending on income and filing status. State rates are in addition to this, not instead of it. A high earner in California pays federal tax plus California's 13.3 percent state tax on the same income.

Some states allow you to deduct state income tax paid from your federal return, which reduces the federal tax you owe. However, the federal deduction for state and local taxes (SALT) is capped at $10,000 per year as of 2024, so high earners in high-tax states may not recoup the full benefit.

What affects your actual state tax bill

Your actual state income tax depends on four things: the state you live in, your total income, your filing status (single, married filing jointly, head of household), and any deductions or credits you claim. Two people with the same income in the same state can owe different amounts if one claims more deductions or credits.

Common deductions include the standard deduction (which varies by state and filing status) and itemized deductions. Common credits include the earned income tax credit (EITC), child tax credits, and education credits. Some states offer additional credits for specific situations like property tax paid or dependent care expenses.

Frequently Asked Questions

Does California's 13.3 percent rate apply to everyone?

No. The 13.3 percent rate only applies to income above $680,000 for single filers and $1.36 million for married couples filing jointly. Most California residents pay between 1 and 9.3 percent depending on their income level.

If I move to a state with no income tax, do I save money?

Not necessarily. States without income tax typically charge higher sales tax or property tax. Whether you save depends on your income level, how much you spend, and whether you own property. A high earner who spends little may save; someone with modest income and a home may not.

Can I reduce my state income tax by claiming deductions?

Yes, if your state allows them. Most states let you claim either a standard deduction or itemized deductions, similar to federal tax. Some states also offer credits for specific expenses like education or childcare. Check your state's tax agency website for the deductions and credits available to you.

Is state income tax withheld from my paycheck?

Yes, in states that have income tax. Your employer withholds state income tax based on the form you complete (usually a W-4 or state equivalent). If too much is withheld, you get a refund when you file; if too little is withheld, you owe when you file.