How the 50 States Rank By State and Local Tax Rates in 2025

Most states use the federal tax code as the starting point for their own income taxes, but states vary in their approaches to bringing in the federal standard deduction and (currently suspended) personal exemption. Some states are conformed to out-of-date versions of the Internal Revenue Code (IRC), with California, which uses a 2015 (pre-TCJA) conformity date, as the most extreme case. Even absent conformity, some states chose to raise their own deductions and exemptions post-TCJA, which was particularly appropriate given the base-broadening nature of the federal law, some of which flowed through to state tax codes.

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• If the tax return is filed and any tax due is paid by January 31 of the following tax year, no penalty will be due for any underpayment of the fourth quarter installment payment.
• Some public employee unions argue these taxes are necessary to stabilize long-underfunded pension obligations, but critics argue the double tax burden is driving residents and businesses out.
• Income tax returns for calendar year filers are due April 15th of the next year.
• Economic factors also weigh in; states may lower rates to invigorate growth or increase them during economic downturns.

Interest on state and local bonds is generally exempt from federal income tax and therefore not included in federal taxable income. However, any state or local bond interest, other than interest from the State of Colorado or any political subdivision thereof, is subject to Colorado income tax and therefore must be added to federal taxable income. Political subdivisions include any city, county, or special district in Colorado.

• In March 2024, legislation was enacted reducing Utah’s individual and corporate income tax rates from 4.65 to 4.55 percent, retroactively effective as of January 1, 2024.
• More specifically, marijuana retailers must pay a 15% excise tax when they buy from a cultivator, leaving consumers to pay the other 15% in the form of a sales tax at the time of purchase.
• Previously, she was a copy editing intern at NerdWallet through the Dow Jones News Fund internship program.
• Still, a 2024 WalletHub report ranked Pennsylvania in the top 10 for tax fairness, due to its predictability and lack of sudden changes.
• The following is a list of statutes, regulations, forms, and guidance pertaining to income tax refunds.

Wyoming Income Tax Brackets

Education is the process of acquiring knowledge, skills, values, and attitudes through formal or informal means. This category includes metrics such as literacy rates, enrollment rates, teacher-to-student ratio, and educational attainment. Other metrics like education spending, curriculum quality, and technological readiness are also included. Economics is the study of how societies allocate and manage resources to meet human needs retained earnings and wants. This category includes metrics such as gross domestic product (GDP), inflation, unemployment, and international trade.

New Jersey Income Tax Brackets

If the tax return is filed and any tax due is paid by January 31 of the following tax year, no penalty will be due for any underpayment of the fourth quarter installment payment. For tax years 2024 through 2030, individuals must make an addition on their Colorado returns for any Financial Forecasting For Startups business deduction claimed for business meals. The required addback is equal to the full amount of the deduction claimed pursuant to section 274(k) of the Internal Revenue Code. Most states tax capital gain and dividend income in the same manner as other investment income.

• There are two ways to be considered a full-time resident of Massachusetts.
• Personal property is tangible property that produces income (is used for business purposes), while real property is immovable property, such as buildings and land.
• Remember, it’s best practice to consult a licensed tax professional about any potential credits, deductions or to verify a state’s specific tax rate.
• Alabama has a progressive income tax system with a top marginal rate of 5.0%, applying to incomes over $3,000 for individuals and $6,000 for married couples filing jointly.
• According to the Tax Foundation’s 2025 State Tax Competitiveness Index, Wyoming is the best state to live in, taxes-wise, while New York is the worst.
• Hawaii compensates for its lack of a general sales tax (it uses a general excise tax instead) by leaning more heavily on income-based revenue, which funds healthcare, education, and tourism maintenance services.
• Meanwhile, nine states, including Florida, Texas and Washington, don’t tax income at all.

An individual files an original return late, on June 20, 2018, for tax year 2015. The return reports $12,000 of tax, claims $10,000 in estimated payments, and is accompanied by a payment of $2,000 for the remaining tax balance. The individual files an amended return on August 15, 2020 reporting a $6,000 decrease in tax and claiming a refund for the $6,000 reduction in tax. The following is a list of statutes, regulations, forms, and guidance pertaining to estimated payments for individuals. Taxpayers may use the annualized income installment method only if they also use the annualized income installment method to compute their federal estimated tax payments.

Flat Tax Rate

A subtraction is allowed for the following types of income, if included in a taxpayer’s federal taxable income, in order to fully or partially exempt this income from Colorado taxation. This publication is designed to provide taxpayers with general guidance regarding Colorado individual income tax, including the calculation of the tax, filing of returns, and other related requirements. Nothing in this publication modifies or is intended to modify the requirements of Colorado’s statutes and regulations. Taxpayers are encouraged to consult their tax advisors for guidance regarding specific situations. Whether you live in a state with no income tax or one with some of the highest progressive brackets, this guide will help you compare state income tax rates in 2024 and 2025 so you can make more informed decisions.

Business Tax Extension

Have some of the highest marginal tax rates, with each having a top tax rate above 10%. However, it’s important to keep in mind that not everyone pays the highest tax rate and that state income taxes don’t make up the whole picture when looking at the overall tax burden. As is the case for federal returns, the amount you’ll pay to your state is also a function of your filing status, whether you have dependents, and whether you qualify state income tax rates for tax deductions and credits. Below is a table you can use to compare income tax rates across all 50 states. These rates typically apply to single filers, not married couples filing jointly. States with a range use progressive tax brackets, while single percentage values represent flat tax rates.

State Individual Income Tax Rates and Brackets, 2025

Understanding and managing your taxes according to your specific state and local government legislation can be challenging, but luckily there are steps you can take to make it easier on yourself. For more information about the specific taxes imposed by your jurisdiction, refer to your state on the official state tax department website. Examples of local taxes include regulations such the Los Angeles Property Tax and San Francisco Hotel Tax in California, or the Las Vegas Tourism Tax in Nevada. Federal income tax is collected by the Internal Revenue Service (IRS) and covers a range of earnings such as salaries, wages, bonuses, profits, investments, and winnings.