Your Guide to State Income Tax Rates

state income tax rates

2022 inflation-adjusted amounts were not announced as of publication, so 2021 inflation-adjusted amounts are shown. (bb) The standard deduction is 15 percent of income with a minimum of $1,600 and a cap of $2,400 for single filers and married filing separately filers. The standard deduction is a minimum of $3,200 and capped at $4,850 for MFJ filers, head of household filers, and qualifying widows/ widowers. 2023 inflation-adjusted amounts were not announced as of publication, so 2022 inflation-adjusted amounts are shown. For states with progressive tax systems, note that the dollar amounts in the income brackets apply to single filers; in many states, the income brackets double for joint returns. And, 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 for tax deductions and credits.

Broadly, this means that the government decides how much tax you owe by dividing your taxable income into chunks — also known as tax brackets — and each chunk gets taxed at the corresponding tax rate. The progressive tax system also means that people with higher taxable incomes are subject to higher federal income tax rates, and people with lower taxable incomes are subject to lower federal income tax rates. The beauty of tax brackets is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income. While the change is retroactive to January 1, 2021, New York’s individual income tax increase is notable as one of only two individual income tax rate increases implemented in the last year. As part of the FY 2022 Enacted Budget Bill, New York’s top marginal rate for individual income taxation increased from 8.2 percent to 10.9 percent.

New Hampshire Income Tax Brackets

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  • Which bracket you fall into and how much income tax you might pay depends on factors such as your marital status, residency and taxable income.
  • The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment.
  • In 2024, the top tax rate of 37% applies to those earning over $609,350 for individual single filers, up from $578,125 last year.
  • Rather than have taxpayers itemize deductions on their returns, Wisconsin offers a tax credit for certain federally-itemized deductions.
  • Separate expenses, such as room and board or athletic tickets, may not be included.
  • You may hear people say that they are in the 12% tax bracket or the 22% bracket, but this does not mean all of their income is taxed at that percentage; instead, that is the highest tax rate — the marginal rate — that applies to a portion of their income.

If your total household income is over $24,680, you will not qualify for this credit. Tax credits are a type of tax benefit that decreases your taxes owed by the credit amount. Some credits may also be refundable, meaning if the credit amount exceeds how much you owe in taxes, you might be able to get the overage back in the form of a refund. Residents of several counties that were affected by Hurricane Idalia may have until Feb. 15, 2024, to file federal returns — but only if they had already timely filed for an extension.

Income Tax Rate By State

When some share of the burden of a tax imposed in one state is borne by those who live elsewhere, this phenomenon is known as tax exporting. The marginal tax rate is the tax us state income tax rates rate paid on your last dollar of taxable income. States tend to have flat tax rates because they're believed to be simpler to administer and regulate, according to Davis.

  • As the IRS releases 2024's tax inflation adjustments, it's a good opportunity to proactively plan for how much you could owe in 2025.
  • State income tax return deadlines usually mirror the federal deadline, but exceptions exist.
  • The federal Tax Cuts and Jobs Act of 2017 (TCJA) increased the standard deduction (set at $13,850 for single filers and $27,700 for joint filers in 2023) while suspending the personal exemption by reducing it to $0 through 2025.
  • This study is not an endorsement of policies that attempt to export tax burdens.
  • (mm) The standard deduction begins to phase out at $16,989 in income for single filers and $24,519 in income for joint filers.
  • The same is true for states like North Dakota and Wyoming where, once this allocation is made, the aggregate tax burden falls from among the nation’s highest to the lowest.

Keep abreast of significant corporate, financial and political developments around the world. Stay informed and spot emerging risks and opportunities with independent global reporting, expert commentary and analysis you can trust. Similarly, North Dakota’s burden has fallen from 13.0 percent in 1977 to 8.8 percent of net state product in 2022. Table 3 lists each state’s burden as a share of income, including rankings, for the three most recent calendar years available. The 2022 law did include "protections" that would pause the rolling cuts any year state revenue doesn't grow by 3%, is lower than the past five years, or the state doesn't have enough money in its savings account.