State Income Taxes
State taxes can dramatically affect your total tax burden. Nine states have no income tax, while California tops out at 13.3%.
🗺️ No Income Tax States (2025)
AlaskaFloridaNevada
New HampshireSouth DakotaTennessee
TexasWashington*Wyoming
*Washington has a 7% capital gains tax on gains over $278K (+ 2.9% surcharge on gains over $1M) but no tax on wages/salary.
Highest & Lowest Tax States
Highest Rates
Top marginal rates
- 🔴 California: 13.3% (over $1M)
- 🔴 Hawaii: 11.0%
- 🔴 New Jersey: 10.75%
- 🔴 New York: 10.9% (+3.88% NYC)
- 🔴 Oregon: 9.9%
- 🔴 Minnesota: 9.85%
VS
Lowest Rates
Flat tax states
- 🟢 North Dakota: 1.95% (2 brackets)
- 🟢 Arizona: 2.5% flat
- 🟢 Indiana: 3.0% flat
- 🟢 Pennsylvania: 3.07% flat
- 🟢 Michigan: 4.25% flat
- 🟢 Colorado: 4.4% flat
Moving Between States
If you move mid-year, you typically file part-year resident returns in both states.
Remote Work Implications
Some states tax remote workers based on where the employer is located. New York's "convenience of the employer" rule is especially aggressive.
Reciprocity Agreements
Some neighboring states let you only pay tax to your resident state. Examples: DC-VA-MD, NJ-PA, IL-IN-IA-KY-MI-WI.
SALT Deduction Cap
SALT cap raised to $40,000 for 2025-2029 by OBBBA (from $10K under TCJA). Phases down for income over $500K. Reverts to $10K in 2030.