Bella graduated from The University of Oklahoma with a bachelor’s degree in journalism. With changes every year, tax compliance is a moving target. Paycor Compliance Solutions provide peace of mind by automating withholdings and providing in-product compliance updates for key changes. Backed by solid tax and compliance expertise, Paycor’s compliance software also keeps you in the know on minimum wage, pay frequency requirements, and more. West Accounting Periods and Methods Virginia’s graduated top rate reduces from 5.12% to 4.82% in 2025. As long as revenue goals are met, the state intends to keep lowering the rate.
- In Mississippi, the flat income tax rate of 4.7% was reduced to 4.4% for 2025.
- 252, enacted in March 2024, New Mexico made notable changes to its tax bracket structure, primarily affecting low- and middle-income households.
- Numerous tax changes took effect in Kansas as a result of Senate Bill 1, enacted in June 2024.
- Taxpayers who take the standard deduction cannot also itemize their deductions; it serves as an alternative.
State Individual Income Tax Rates and Brackets, 2023
This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Use these handy biweekly, semi-monthly, and monthly payroll calendar templates to stay on top of pay periods and pay dates in 2026. The top rate in Nebraska reduces from 5.84% to 5.2%. The reduction is part of Legislative Bill 754, which will gradually reduce the top rate to 3.99% by 2027.
- In a progressive individual or corporate income tax system, rates rise as income increases.
- 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.
- Some states have a progressive tax, while others have a flat tax.
- Previously, she was a copy editing intern at NerdWallet through the Dow Jones News Fund internship program.
- For example, the top rate kicks in at or above $1 million in California (when the “millionaire’s tax” surcharge is included), Massachusetts, New Jersey, New York, and the District of Columbia.
- Starting January 1, 2025, the lowest rate of 1.4 percent will apply to single-filer income below $9,600 (up from $2,400 in 2024), while the highest rate of 11 percent will apply to income exceeding $325,000 (up from $200,000).
- Bella Avila is a content management specialist on the investing and taxes team at NerdWallet.
When are state income tax returns due?
In some states, a large number of brackets are clustered within a narrow income band. For example, Virginia’s taxpayers reach the state’s fourth and highest bracket at $17,000 in taxable income. In other states, the top rate QuickBooks Accountant kicks in at a much higher level of marginal income. For example, the top rate kicks in at or above $1 million in California (when the “millionaire’s tax” surcharge is included), Massachusetts, New Jersey, New York, and the District of Columbia.
State Income Tax Filing Deadlines
1001, enacted in May 2023, Indiana accelerated its previously enacted tax rate reductions, lowering the individual income tax rate from 3.05 in 2024 to 3.00 percent in 2025. The law also repealed previously enacted tax triggers, instead prescribing a rate reduction to 2.95 percent in 2026, and 2.9 percent in 2027 and beyond. 259, enacted in September 2023, North Carolina accelerated the reduction of its flat individual income tax rate.
Flat Tax Rate
Brackets will be further widened in 2027, with additional increases to the standard deduction phased in over several years. HB 2404 will reduce income tax rates through 2031. For 2025, the lowest tax rate of 1.4% now applies to single-filer income below $9,600 (up from $2,400 in 2024), and the highest rate of 11% applies to income exceeding $325,000 (up from $200,000). 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. As part of its comprehensive tax reform, effective January 1, 2025, Iowa consolidated its three tax brackets into a single bracket with a rate of 3.8 percent, joining the group of states with flat individual income taxes.
State Individual Income Tax Rates and Brackets, 2015
521 was enacted, retroactively reducing Idaho’s individual and corporate income tax rates from 5.8 to 5.695 percent as of January 1, 2024. 1015, enacted in April 2024, us state income tax rates the flat individual income tax rate for 2024 decreased from 5.49 percent to 5.39 percent. Although the bill allowed for an accelerated schedule of future individual income tax rate reductions, the revenue conditions were not met for 2025, so the rate remains at 5.39 percent this year. State income tax rates receive relatively little attention compared with federal income taxes, but they can still put a large dent in your wallet. How large depends on the amount you earn, as well as where you live and work.
Still have questions about state income tax rates? The passing of Iowa Senate File 2442 replaced Iowa’s previous graduated income tax rate with a flat rate of 3.8% beginning with the 2025 tax year. Iowans at the top of the graduated rates previously paid 5.7% in income tax. Indiana implemented a slight change to its flat tax rate, reducing it from 3.05% to 3%. The staggered income tax cuts go through 2027, when a 2.9% tax rate will apply.