Remote workers may owe income taxes in multiple states if they live in one state but work for a company based in another. Some states have reciprocal agreements that allow residents to pay taxes only in their home state, while others require taxes to be paid to both states with possible credits to avoid double taxation. The rules for remote work taxation can be complex, and consulting a tax professional may help determine the correct obligations. Choose any state from the list above for detailed state income tax information including 2025 income tax tables, state tax deductions, and state-specific income tax calculators. Many state pages also provide direct links to selected income tax return forms and other resources.

• Comprehensive Guide to Federal Tax Forms Federal tax forms are official documents provided by the…
• From income to property to sales taxes — and all the other taxes in between — each state crafts a unique tax profile that can affect your wallet in different ways.
• The effect is that residents pay the equivalent of the federal income tax to the dependency, rather than to the U.S. government.
• Keep in mind that most taxpayers don’t itemize their deductions.
• Unlike tax credits, personal exemptions are subtracted from a taxpayer’s gross income and depend on your status and number of dependents.

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For instance, Colorado imposes a flat rate of 4.40%, while Illinois taxes trial balance income at 4.95%. This straightforward approach can simplify tax planning for residents. State income tax rates are an important factor when deciding to relocate, but they are not the only tax-related consideration. Before making a move, individuals should research other tax obligations, such as property taxes, sales taxes, and potential estate or inheritance taxes that could impact their financial situation.

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The argument for graduated tax rates is that they’re tied to your income so those who earn more pay more. A flat tax, on the other hand, can have state income tax rates a disproportionate impact on low-income taxpayers. These states typically make up for the lack of income tax revenue through other means, such as higher sales taxes, property taxes, or natural resource revenues. Based on this chart, New Hampshire taxpayers with median incomes pay 14.1% of their income in state and local taxes. Massachusetts taxpayers with the same median incomes pay less—11.8%.

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You’ll notice that the brackets vary depending on whether you are single, married or a head of household. While it often makes sense to file jointly, filing separately may be the better choice in certain situations. While we don’t have the exact numbers for future years, we have a clear roadmap of the changes to come. By understanding the current tax brackets and preparing for the significant rate changes scheduled for 2026, you can make proactive and informed decisions to protect your income. In nearly all states, the tax on capital gains and dividend income is similar to any other income from investments. Individuals who are non-residents of the state do not have to pay any state income taxes related to capital gains or dividend income.

If you live and work in the same state, you probably need to file only one state return each year. But if you moved to another state during the year, lived in one state but worked in another, or have, say, income-producing rental properties in multiple states, you might need to file more than one state return. Because the price of many tax software packages includes preparation and filing for only one state, filing multiple state income tax returns can often mean paying extra. It is similar to a federal income tax, but instead funds state budgets rather than the federal government. Some states have a progressive tax, while others have a Travel Agency Accounting flat tax.

Rental Income Tax: How Is Rental Income Taxed

• Since 2017, taxpayers’ federal tax exemptions have been set to $0.
• Since 2010, he has led Community Tax, assembling a team of skilled attorneys, CPAs, and enrolled agents to assist individuals and businesses with tax resolution, preparation, bookkeeping, and accounting.
• 6941, Connecticut legislators reduced individual income tax rates for the two lowest brackets, from 3 percent to 2 percent and from 5 percent to 4.5 percent, respectively.
• Most state governments in the United States collect a state income tax on all income earned within the state, which is different from and must be filed separately from the federal income tax.

The rate chart below provides Wisconsin’s state, county, and city sales and use tax rates. See Publication 201, Wisconsin Sales and Use Tax Information, Part 7.C for more information on where a sale takes place. Those in areas of California that were impacted by the January wildfires have until Oct. 15, 2025, to file both their state and federal tax returns. Knowing the difference between state and federal income taxes can serve you well when creating a budget or considering a move. Even if two states have similar tax rates, their rules about who pays and what’s taxed can vary widely. Learn which states have the highest tax rates, no taxes, and flat taxes; and see a complete list of tax rates for every state in the union.

Some are levied directly from residents and others are levied indirectly. This table includes the per capita tax collected at the state level. State tax levels indicate both the tax burden and the services a state can afford to provide residents.

Accessing Current State Tax Rate Tables

• Certain laws may be specific to money earned specifically in that state, while others may place a tax on income generated from anywhere.
• 1001, enacted in May 2023, Indiana accelerated its previously enacted tax rate reductions, lowering the individual income tax rate from 3.15 in 2023 to 3.05 percent in 2024.
• This means that employers withhold money from employee earnings to pay for taxes.
• Individual income taxes are a major source of state government revenue, accounting for 33 percent of state tax collections in fiscal year 2023, the latest year for which data are available.
• Property taxes, primarily administered at the local level, are influenced by state laws and can vary widely based on location and property type.
• Hawaii residents pay out around 7.2% of their income in sales and excise taxes every year.

These state income tax rates apply to income earned in 2025, which is reported on tax returns filed in 2026. To learn more about how your state income tax rates work, visit your state’s taxation and revenue department website. Most states impose a tax on income of corporations having sufficient connection (“nexus”) with the state. Such taxes apply to U.S. and foreign corporations, and are not subject to tax treaties. Such tax is generally based on business income of the corporation apportioned to the state plus nonbusiness income only of resident corporations.

States With Flat Rate Income Tax

At the same time, via HB3, the state has now eliminated the economically harmful corporation franchise tax, a capital stock tax, putting the state on the path to a more efficient tax system. A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.