State Income Tax: The Complete Guide for 2026
Last updated: March 15, 2026
The Nine States With No Income Tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming levy no state income tax on wages and salaries. New Hampshire eliminated its last form of income tax (on interest and dividends) at the end of 2024.
For a household earning $100,000, living in one of these states versus a state with a 5% income tax rate means roughly $5,000 more per year in take-home pay. At 10% (California, New York), the difference approaches $10,000. Over a 30-year career, that compounds into hundreds of thousands of dollars.
But no-income-tax states are not automatically cheaper. They fund government through other means: Texas has the sixth-highest property taxes nationally (1.6%). Washington has one of the highest sales tax rates (combined 9.2% average). Tennessee's combined sales tax averages 9.55%. Florida's insurance costs are among the nation's highest. The total tax burden depends on your income, spending, and property ownership.
How State Income Tax Works
Most states with income tax use one of two systems. Flat tax states charge the same rate regardless of income. Colorado (4.4%), Illinois (4.95%), Indiana (3.05%), and 10 other states use this approach. It is simple and predictable.
Graduated tax states charge higher rates on higher income. California's rates range from 1% to 13.3%. New York's range from 4% to 10.9%. Hawaii ranges from 1.4% to 11%. The top rate usually applies only to income above a certain threshold, not to all income.
A few states have quirks. Ohio and many Ohio cities levy local income taxes. New York City has its own income tax on top of the state's. Maryland counties each charge their own income tax rate. Pennsylvania has a flat 3.07% state tax but cities add 1 to 3.75%.
The Highest Tax States
California (13.3% top rate), Hawaii (11%), New Jersey (10.75%), Oregon (9.9%), and Minnesota (9.85%) have the highest top marginal rates. But the top rate does not tell the whole story. California's 13.3% applies only above $1 million. Oregon's 9.9% kicks in at just $125,000, catching many more people at the top rate.
Massachusetts added a 4% surtax on income above $1 million in 2022, bringing its effective top rate to 9%.
The Impact on Your Paycheck
State income tax is often the largest single tax difference between locations. Here is what a household earning $100,000 pays in state income tax in selected states (simplified estimates):
No-income-tax states: $0. Colorado (4.4% flat): $4,400. North Carolina (4.5% flat): $4,500. Georgia (5.49% flat): $5,490. Oregon (9% effective at this income): $9,000. California (about 6% effective at this income): $6,000. New York (about 6.5% effective, more with NYC tax): $6,500 to $10,000.
The difference between $0 (Texas) and $9,000 (Oregon) is $750/month. That is a car payment. Over a decade, it is $90,000 before investment returns.
Beyond Income Tax
State income tax is the most visible tax, but the total state and local tax burden includes sales tax, property tax, and various fees. A comprehensive comparison should include all three. Our tax comparison tool calculates the combined impact of income tax, sales tax, and property tax for any two states based on your specific income, spending, and home value.
For state-by-state details, explore our 50 state profiles, each with a detailed tax section.