United States Income Taxes Ranked by State
by Grant Marsten - February 2025 (Updated September 2026)
Where you live can have a significant effect on your retirement taxes. State individual income-tax systems vary considerably across the United States, with some states imposing graduated income taxes, others using a single flat rate, and several states imposing no individual income tax on wages and salaries at all.
This article has been updated for 2026 tax rates to provide a current comparison of state individual income taxes. Rather than using the old $75,000 household example and presenting an estimated "effective rate" as though it applied equally to everyone, the table below compares each state's top marginal individual income-tax rate.
A top marginal rate is the percentage applied to the highest portion of taxable income once a taxpayer reaches that state's top bracket. It is not the percentage of total income that every resident pays.
2026 State Income Tax Overview
According to the Tax Foundation's 2026 data, 42 states levy an individual income tax. Forty-one states tax wage and salary income, while Washington has an individual tax that applies to certain capital gains rather than ordinary wage income. Eight states currently have no individual income tax. New Hampshire joined that group after repealing its tax on interest and dividend income beginning in 2025.
Among states that tax ordinary individual income, 15 use a single-rate structure while 26 states plus Washington, D.C. use graduated-rate systems. Top marginal rates range from relatively low rates to California's 13.3% top rate.
How the Rankings Work
The table below is ordered by the top marginal individual income-tax rate for 2026. This provides a consistent way to compare state income-tax systems, but it should not be interpreted as a ranking of the actual tax bill paid by a household.
Actual state taxes depend on income, filing status, deductions, exemptions, credits, special tax provisions and, in some states, local income taxes. For example, a taxpayer may never reach a state's top marginal bracket, meaning their effective state tax rate could be substantially lower than the headline rate.
2026 U.S. State Income Tax Rates
- California — 13.30% top marginal rate
- Hawaii — 11.00%
- New York — 10.90%
- New Jersey — 10.75%
- Oregon — 9.90%
- Minnesota — 9.85%
- Massachusetts — 9.00%
- Vermont — 8.75%
- Wisconsin — 7.65%
- Maine — 7.15%
- Connecticut — 6.99%
- Delaware — 6.60%
- Maryland — 6.50%
- Rhode Island — 5.99%
- New Mexico — 5.90%
- Kansas — 5.58%
- Montana — 5.65%
- Virginia — 5.75%
- Georgia — 5.19%
- Idaho — 5.30%
- Wisconsin — 7.65%
- Alabama — 5.00%
- Illinois — 4.95%
- West Virginia — 4.82%
- Missouri — 4.70%
- Oklahoma — 4.50%
- Utah — 4.50%
- Colorado — 4.40%
- Wisconsin — 7.65%
- Michigan — 4.25%
- North Carolina — 3.99%
- Arkansas — 3.90%
- Iowa — 3.80%
- Kentucky — 3.50%
- Louisiana — 3.00%
- Indiana — 2.95%
- Ohio — 2.75%
- Arizona — 2.50%
- North Dakota — 2.50%
- Oklahoma — 4.50%
- Pennsylvania — 3.07%
- Mississippi — 4.00%
- Nebraska — 4.55%
- South Carolina — 5.21% for 2026
- Washington, D.C. — 10.75%
- Washington — no tax on ordinary wage income; 7% and 9% rates apply to certain capital gains
- Alaska — no individual income tax
- Florida — no individual income tax
- Nevada — no individual income tax
- New Hampshire — no individual income tax
- South Dakota — no individual income tax
- Tennessee — no individual income tax
- Texas — no individual income tax
- Wyoming — no individual income tax
Note: The list above is intended as a quick overview. For the detailed 2026 rates and brackets, see the table below. The Tax Foundation data identifies California's 13.3% rate as the highest top marginal individual income-tax rate among states and identifies eight states with no individual income tax.
Detailed 2026 State Tax Comparison
| State | 2026 Top Rate | Tax Structure |
|---|---|---|
| California | 13.30% | Graduated |
| Hawaii | 11.00% | Graduated |
| New York | 10.90% | Graduated |
| New Jersey | 10.75% | Graduated |
| Oregon | 9.90% | Graduated |
| Minnesota | 9.85% | Graduated |
| Massachusetts | 9.00% | Graduated |
| Vermont | 8.75% | Graduated |
| Wisconsin | 7.65% | Graduated |
| Maine | 7.15% | Graduated |
| Connecticut | 6.99% | Graduated |
| Delaware | 6.60% | Graduated |
| Maryland | 6.50% | Graduated |
| Rhode Island | 5.99% | Graduated |
| New Mexico | 5.90% | Graduated |
| Virginia | 5.75% | Graduated |
| Montana | 5.65% | Graduated |
| Kansas | 5.58% | Graduated |
| Georgia | 5.19% | Flat |
| South Carolina | 5.21% | Graduated / 2 brackets |
| Idaho | 5.30% | Flat |
| Alabama | 5.00% | Graduated |
| Illinois | 4.95% | Flat |
| West Virginia | 4.82% | Graduated |
| Missouri | 4.70% | Graduated |
| Nebraska | 4.55% | Graduated |
| Oklahoma | 4.50% | Graduated |
| Utah | 4.50% | Flat |
| Colorado | 4.40% | Flat |
| Michigan | 4.25% | Flat |
| Mississippi | 4.00% | Flat / simplified |
| North Carolina | 3.99% | Flat |
| Arkansas | 3.90% | Graduated |
| Iowa | 3.80% | Flat |
| Pennsylvania | 3.07% | Flat |
| Louisiana | 3.00% | Flat |
| Indiana | 2.95% | Flat |
| Ohio | 2.75% | Flat |
| Arizona | 2.50% | Flat |
| North Dakota | 2.50% | Graduated |
| Alaska | None | No individual income tax |
| Florida | None | No individual income tax |
| Nevada | None | No individual income tax |
| New Hampshire | None | No individual income tax |
| South Dakota | None | No individual income tax |
| Tennessee | None | No individual income tax |
| Texas | None | No individual income tax |
| Wyoming | None | No individual income tax |
Washington Is a Special Case
Washington does not impose an individual income tax on ordinary wage and salary income. However, it does impose a tax on certain long-term capital gains.
For 2026, Washington's capital-gains tax has a graduated structure, including a 7% rate and a 9% top rate on capital gains above $1 million. This is fundamentally different from a conventional state income tax on wages, so Washington should not simply be treated as a "9% income-tax state."
Washington, D.C. Is Not a State
Washington, D.C. is included in many state tax comparisons because it has its own individual income-tax system, but it is not one of the 50 states.
D.C.'s 2026 individual income-tax rates range from 4% to a top marginal rate of 10.75%. The highest rate applies at very high income levels.
Why State Income Taxes Matter in Retirement
State income taxes can become particularly important during retirement because retirees often have more flexibility about where they live.
A retirement move can change the taxation of:
- Social Security benefits
- 401(k) and IRA withdrawals
- Roth conversions
- Pension income
- Capital gains
- Interest and dividends
- Business and rental income
- Required minimum distributions
However, state income tax should never be considered in isolation. Property taxes, sales taxes, insurance costs, housing costs, healthcare costs and the taxation of retirement-specific income can all materially affect the overall cost of living.
Top Marginal Rate vs. Your Actual Tax Bill
It is important not to confuse a state's top marginal tax rate with the amount a retiree will actually pay.
For example, a state may have a 10% or higher top marginal rate, but that rate may apply only to income far above the level earned by most households. A retiree with $60,000 of taxable income could therefore face a very different tax rate than someone earning several hundred thousand dollars.
State deductions, exemptions, credits and special retirement-income exclusions can also significantly change the final tax bill.
State Taxes and Retirement Planning
If you are deciding where to retire, compare the complete tax picture rather than simply looking for a state with the lowest headline income-tax rate.
For example, a state with no individual income tax may have higher property taxes, insurance costs or other expenses. Conversely, a state with an income tax may provide specific exemptions or credits for retirees that make its overall tax treatment different from the headline rate.
The right comparison depends on your specific income sources and spending needs.
What Changed Since the Original Article?
The original version of this article used a hypothetical $75,000 family income and reported estimated effective tax rates for each state. Those figures have been removed because they could give readers the impression that the rates applied broadly to all taxpayers.
The 2026 version instead uses published state tax rates and identifies whether each state uses a flat, graduated or no-income-tax structure. This makes the comparison more transparent and easier to maintain as state tax laws change.
Several specific changes are also important:
- New Hampshire: New Hampshire no longer has an individual income tax after repealing its interest and dividends tax beginning in 2025.
- Ohio: Ohio moved to a 2.75% top rate for 2026.
- Indiana: Indiana's rate fell to 2.95% for 2026.
- Kentucky: Kentucky's rate fell to 3.50% for 2026.
- Mississippi: Mississippi's rate fell to 4.00% for 2026.
- Montana: Montana's top rate fell to 5.65% for 2026.
- Nebraska: Nebraska's top rate fell to 4.55% for 2026.
- North Carolina: North Carolina's flat rate fell to 3.99% for 2026.
- Oklahoma: Oklahoma's top rate fell to 4.50% for 2026.
- South Carolina: South Carolina adopted a new two-bracket structure for 2026, with a 1.99% rate below $30,000 and a 5.21% rate, less a $966 adjustment, at $30,000 and above.
- Washington: Washington's capital-gains tax now has a 9% top rate on capital gains above $1 million, while ordinary wage income remains untaxed at the state level.
These changes illustrate why state-tax comparisons should be reviewed periodically rather than relying on an older ranking.
How Retirementize Can Help
Your state of residence is only one part of retirement tax planning. The amount and type of retirement income you receive can be just as important.
Retirementize can help you model retirement income, withdrawals, taxes and after-tax cash flow so you can understand how your financial plan changes over time.
If you are considering a move before or during retirement, use your projected income and expenses to compare the potential impact of different locations rather than relying on a single headline tax rate.
Key Takeaways
- State income-tax systems vary substantially across the United States.
- Eight states have no individual income tax in 2026.
- Washington does not tax ordinary wage income but does tax certain capital gains.
- State top marginal rates do not represent the effective tax rate paid by every resident.
- Tax brackets, deductions, credits and retirement-income exclusions can significantly affect your actual tax bill.
- Local income taxes can also apply in some states.
- Retirees should consider the taxation of pensions, Social Security, retirement-account withdrawals and investment income separately.
- State income tax is only one component of the overall cost of living and retirement-tax picture.
Sources
State tax rates and structures in this article are based primarily on the Tax Foundation's 2026 State Individual Income Tax Rates and Brackets.
South Carolina's 2026 tax structure was cross-checked against the South Carolina Department of Revenue.
