State Income Tax 2026: Which States Tax the Least (and Most)?
📑 In this guide
State income tax is the single biggest variable in your after-tax income that you control by where you live. In 2026, nine states collect no personal income tax at all, fifteen use a single flat rate, and twenty-six plus D.C. use progressive brackets — with top rates from 2.5% (North Dakota) to 13.3% (California). Here is the full picture, state by state.
The nine no-income-tax states (2026)
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming collect no personal income tax on wages. Two asterisks:
- New Hampshire repealed its interest & dividends tax effective Jan 1, 2025 — it now taxes no individual income at all (business income is still taxed).
- Washington taxes long-term capital gains above $278,000 (7%–9.9%), but not salaries or wages.
These states make up the gap with higher sales taxes (TN 7%, TX 6.25% state + local), property taxes, or — in Nevada’s case — gaming revenue.
The fifteen flat-tax states (2026)
A flat tax applies one rate to all taxable income. Simpler, but the rate hits low earners proportionally harder.
| State | Flat rate | State | Flat rate |
|---|---|---|---|
| Arizona | 2.5% | Kentucky | 3.5% |
| Ohio | 2.75% | Iowa | 3.8% |
| Indiana | 2.95% | Mississippi | 4.0% |
| Louisiana | 3.0% | Michigan | 4.25% |
| Pennsylvania | 3.07% | Colorado | 4.4% |
| North Carolina | 3.99% | Utah | 4.5% |
| Illinois | 4.95% | Georgia | 5.19% |
| Idaho | 5.3% |
Several are still phasing down: Kentucky (targeting 0%), North Carolina, Mississippi (to 3% by 2030), and Indiana (to 2.9% in 2027).
Highest top marginal rates (2026)
| State | Top rate | Note |
|---|---|---|
| California | 13.3% | 12.3% + 1% surtax over $1M |
| Hawaii | 11.0% | |
| New York | 10.9% | NYC adds resident tax |
| New Jersey / D.C. | 10.75% | |
| Oregon | 9.9% | No sales tax offset |
| Minnesota | 9.85% |
Reality check: these are top-bracket rates. On a $100,000 taxable income, California’s effective rate is roughly 6–7%, not 13.3% — the top rate applies only to income above ~$700,000.
2026 rate changes to know
- Kentucky: 4.0% → 3.5% flat (H.B. 1), further cuts scheduled
- Indiana: 3.0% → 2.95% (2.9% in 2027)
- Mississippi: 4.4% → 4.0% (3% by 2030, 0% targeted)
- North Carolina: 4.25% → 3.99% (final step; possible cuts 2027–2034)
- Ohio: converted to a flat 2.75% on income above $26,050
- Nebraska: top 5.2% → 4.55% (3.99% in 2027)
- Montana: top 5.9% → 5.65% (5.4% in 2027)
- Oklahoma: top 4.75% → 4.5%, simplified to 3 brackets
The full picture: don’t stop at income tax
A no-income-tax state is not automatically cheaper. Texas has high property taxes and an 8.2% average combined sales tax; Tennessee’s is 9.55%. Use the state money data hub to compare income tax and sales tax and minimum wage across all 50 states + D.C., then check the federal tax estimator and home affordability calculator for the complete cost picture.
Educational reference. Sources: Tax Foundation State Individual Income Tax Rates and Brackets 2026; state revenue agencies. Retrieved Aug 11, 2026 — verify current rates before any move decision.