State Income Tax Comparison 2025: All 50 States Ranked

State income tax can significantly affect your take-home pay. The difference between living in a no-tax state and the highest-tax state can be $10,000 or more per year on a six-figure income. Here is a complete comparison for 2025, including major changes from the SALT deduction update.

The 9 States With No Income Tax

These states charge zero individual income tax:

Alaska

Florida

Nevada

New Hampshire (taxes interest and dividends only, phasing out entirely by 2027)

South Dakota

Tennessee

Texas

Washington

Wyoming

Living in a no-tax state on a $100,000 salary saves you roughly $3,000 to $6,000 per year compared to the national average state tax burden. Over a 30-year career, that is $90,000 to $180,000 in tax savings alone — before considering investment returns on the savings. Use our Tax Calculator to see the exact impact.

The 14 Flat Tax States

These states apply one rate to all taxable income, regardless of how much you earn:

Arizona: 2.5%

Colorado: 4.40%

Georgia: 5.19% (new flat rate for 2025, down from 5.39%)

Idaho: 5.3% (reduced for 2025)

Illinois: 4.95%

Indiana: 3.0%

Iowa: 3.8% (new flat rate for 2025)

Kansas: 5.7% (single rate)

Kentucky: 4.0%

Louisiana: 3.0% (new flat rate for 2025)

Michigan: 4.25%

Mississippi: 4.40%

North Carolina: 4.25%

Pennsylvania: 3.07%

Utah: 4.5% (reduced for 2025)

The trend toward flat taxes is accelerating — Georgia, Iowa, and Louisiana all converted to flat-rate systems in 2025. Flat tax states are generally considered more business-friendly, which can attract employers and job growth.

The Highest-Taxed States

States with the highest top marginal income tax rates in 2025:

California: 13.3% (on income over $1 million; includes 1% mental health services surtax)

Hawaii: 11.0% (on income over $325,000)

New Jersey: 10.75% (on income over $1 million)

Oregon: 9.9% (on income over $125,000 single)

Minnesota: 9.85% (on income over $193,240 single)

New York: 10.9% (on income over $25 million; lower rates apply at lower levels)

Vermont: 8.75%

Wisconsin: 7.65%

District of Columbia: 10.75% (on income over $1 million)

Massachusetts: 9.0% (5% flat rate + 4% surtax on income over $1,083,150)

For a detailed look at how federal and state taxes combine on a six-figure income, see our analysis of taxes on a $100K salary.

The SALT Deduction: 2025 Update

The State and Local Tax (SALT) deduction allows taxpayers who itemize to deduct state and local taxes from federal taxable income. Major changes for 2025:

New SALT cap: $40,000 (up from $10,000 since 2018)

Phase-out: The $40,000 cap decreases when MAGI exceeds $500,000 and drops to $10,000 at $600,000+

Married filing separately: $20,000 cap

Future years: Cap increases by 1% annually through 2029, then reverts to $10,000 in 2030

The higher cap primarily benefits households earning $100,000-$500,000 in high-tax states. For example, a household paying $15,000 in state income tax and $12,000 in property tax ($27,000 total SALT) can now deduct the full amount, saving approximately $6,000-$8,000 in federal taxes compared to the old $10,000 cap.

Total Tax Burden: Beyond Income Tax

Income tax is only part of the picture. States also levy sales tax, property tax, and other taxes:

Texas: No income tax, but property taxes average 1.60% — among the highest nationally. A $300,000 home means $4,800/year in property tax.

California: High income tax (up to 13.3%), but property tax is relatively low at 0.71% due to Proposition 13.

Washington: No income tax, but sales tax reaches 10.25% in Seattle (state + local).

New Hampshire: No income tax (soon), but property taxes average 1.86% — the third highest in the nation.

When comparing states, consider all three major tax types together. A state with no income tax often compensates with higher property or sales taxes.

How State Tax Affects Your Career Decisions

The financial impact of state taxes compounds over time. Consider two identical workers earning $100,000:

Worker in Texas (0% state tax): Takes home approximately $78,901 after federal taxes and FICA

Worker in California (effective ~5.8% state tax on $100K): Takes home approximately $73,101

The $5,800 annual difference, invested at 7% over 30 years, grows to approximately $580,000. This is why remote workers increasingly leverage geographic arbitrage — see our guide to highest-paying remote jobs and our Cost of Living Calculator to compare cities.

States That Tax Retirement Income Differently

If you are planning for retirement, note that several states exempt retirement income:

Illinois, Mississippi, and Pennsylvania: Exempt all retirement income (401k, IRA, pensions, Social Security)

Most states: Exempt Social Security benefits from state income tax

13 states: Tax Social Security benefits to some degree (Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, Virginia, West Virginia)

This can significantly affect your retirement planning and where you choose to live after you stop working. Check our Salary Percentile Calculator to understand your income ranking and use our guide to federal tax brackets for the full picture.