Nine states have no personal income tax whatsoever: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire. Residents of these states keep more of each paycheck but may face higher property or sales taxes.
Texas and Florida attract high earners and retirees specifically for their lack of state income tax, though both have significant property tax burdens.
Several states use a flat income tax rate regardless of income level. Examples include: - Illinois: 4.95% flat rate - Indiana: 3.23% flat rate - Massachusetts: 9% flat rate - Pennsylvania: 3.07% flat rate
Flat-tax states offer predictability but may lack progressivity benefits for lower-income taxpayers.
California's top marginal rate exceeds 13% for high earners. New York, New Jersey, and Hawaii also have top rates above 10%. Combined with federal rates, some taxpayers face total marginal rates exceeding 50%.
The $10,000 SALT deduction cap limits federal tax relief for residents of these states, increasing the effective state burden.
Remote workers may face state income tax in both their employer's state and their resident state. Some states have reciprocity agreements, but double taxation remains a risk for cross-border remote employment.
The convenience of the employer rule means you may owe taxes to your employer's state even if you never set foot there.
While our calculator focuses on federal tax, understanding your state tax burden is essential for total tax planning. Add estimated state tax rates to your financial projections alongside federal calculations.