California has the highest top income tax rate at 13.3 percent
California's top marginal income tax rate is 13.3 percent, the highest in the United States. 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 includes a 1 percent Mental Health Tax that was added in 2012 and applies only to high earners.
Hawaii comes second at 11 percent, followed by Vermont and New York, both at 10.9 percent. Oregon reaches 9.9 percent, and Minnesota tops out at 9.85 percent. These rates represent what you pay on your highest income bracket — not your entire income. The threshold where each top rate begins varies widely, which means two states with the same top rate can produce very different tax bills depending on your income level.
Key Takeaways
- California's 13.3 percent top rate is the highest in the nation, but it only applies to income above $680,000 for single filers.
- Top tax rates vary significantly by state, ranging from 13.3 percent in California to zero in nine states with no income tax.
- Your actual tax burden depends on your income level, filing status, and which tax bracket your income falls into, not just the top rate.
- Nine states — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire — have no state income tax on wages.
How marginal tax rates work
The top rate in any state applies only to income in the highest bracket. If California's top rate is 13.3 percent, you do not pay that rate on your first dollar of income. You pay lower rates on lower brackets first, then 13.3 percent only on income above the threshold.
For example, a single filer in California earning $700,000 in 2024 does not pay 13.3 percent on all $700,000. They pay the lower rates on income up to $680,000, then 13.3 percent only on the remaining $20,000. This is why comparing only top rates between states can be misleading — your actual tax depends on where your income falls within the brackets.
States with the highest tax rates by rank
| Rank | State | Top Rate | Applies to Income Above (Single Filer, 2024) |
|---|---|---|---|
| 1 | California | 13.3% | $680,000 |
| 2 | Hawaii | 11.0% | $200,000 |
| 3 | Vermont | 10.9% | $215,050 |
| 4 | New York | 10.9% | $6.85 million |
| 5 | Oregon | 9.9% | $125,000 |
| 6 | Minnesota | 9.85% | $171,221 |
The threshold where the top rate kicks in varies widely. New York's 10.9 percent rate does not apply until income reaches $6.85 million, while Vermont's 10.9 percent rate applies at $215,050. This means a Vermont resident earning $300,000 pays a higher effective rate than a New York resident earning the same amount, even though both states have the same top rate.
Effective tax rate — the percentage of your total income that goes to state tax — depends on both the top rate and where the brackets begin. A state with a lower top rate but lower thresholds can produce a higher effective rate for middle-income earners than a state with a higher top rate that does not kick in until much higher income levels.
States with no income tax
Nine states impose no income tax on wages: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire. New Hampshire is a partial exception — it taxes interest and dividend income but not wages.
Residents of these states pay no state income tax regardless of how much they earn. However, they typically make up the difference through higher sales taxes, property taxes, or other state levies. The total tax burden in a no-income-tax state is not necessarily lower than in a high-income-tax state. A person with high wage income but low spending might pay less overall in a no-income-tax state, while someone with significant property ownership might pay more.
What affects your actual tax bill beyond the top rate
Your state income tax depends on more than just the top rate. The number of tax brackets, the width of each bracket, and the rates for lower brackets all matter. A state with a 9 percent top rate but many brackets and lower thresholds might collect more tax from a middle-income earner than a state with a 10 percent top rate and fewer brackets.
Deductions and credits also change what you owe. Some states offer larger standard deductions, child tax credits, or earned income credits that reduce your final bill. California, for instance, offers a dependent exemption credit that lowers tax for families with children. These provisions can offset a high top rate for certain income levels and filing situations.
How tax rates have changed
California's 13.3 percent rate is relatively recent. The state added a 1 percent Mental Health Tax in 2012 on income over $1 million, raising the top rate from 12.3 percent. This was intended to fund mental health and substance abuse services.
Tax rates in other states shift periodically through legislation. Vermont, New York, and Oregon have all adjusted their brackets and rates in recent years. If you are comparing states for tax purposes, check the current year's rates rather than relying on older information, as rates can change annually or even mid-year through new laws.
Frequently Asked Questions
Does California's 13.3 percent rate apply to everyone in the state?
No. The 13.3 percent rate applies only to income above $680,000 for single filers and $1.36 million for married couples filing jointly. Lower income levels are taxed at lower rates. Most California residents pay rates between 1 and 9.3 percent depending on their income bracket.
If I move to a no-income-tax state, will I pay less in total taxes?
Not necessarily. States without income tax typically collect revenue through sales tax, property tax, or other levies. Your total tax burden depends on your income, spending, and property ownership. A high-income earner might pay less in a no-income-tax state, while a middle-income homeowner might pay more.
Do these rates include federal income tax?
No. State income tax rates are separate from federal income tax. You pay both. The rates shown here apply only to state income tax. Your federal tax is calculated separately based on federal brackets and rules.
Can state income tax rates change year to year?
Yes. States adjust tax brackets, rates, and thresholds regularly, often annually to account for inflation. Some states index their brackets to inflation automatically, while others adjust them through legislation. Always check the current year's rates for the state you are in or considering.