State-by-State Guide to US Income Tax Rates 2025

Understanding how much of your income goes to state taxes is crucial, especially if you’re considering relocating or managing your finances more strategically in 2025. While the federal government applies a uniform tax system nationwide, state income taxes can vary dramatically — from 0% in states like Texas and Florida to over 13% in California.

In this comprehensive state-by-state guide to US income tax rates 2025, we break down the current tax rates for each state so you can plan accordingly.

🏛️ How State Income Tax Works in 2025

Each state sets its own income tax system. These typically fall into one of three categories:

1. No Income Tax States – Residents pay no state income tax.

2. Flat Tax States – One consistent rate for all income levels.

3. Progressive Tax States – Higher income means higher tax rates.

📍 States with No Income Tax (2025)

Residents in the following states enjoy 0% state income tax:

• Texas

• Florida

• Nevada

• Washington

• Alaska

• South Dakota

• Wyoming

• Tennessee (no wage tax; interest/dividends only if any)

💡 Note: While you pay no state income tax, other taxes (sales, property) might be higher to compensate.

📊 Flat Tax States (2025)

These states apply a single flat rate regardless of income level:

State	Flat Rate 2025
Colorado	4.4%
Illinois	4.95%
Indiana	3.15%
Kentucky	4.5%
Michigan	4.25%
Mississippi	4.7%
North Carolina	4.5%
Pennsylvania	3.07%
Utah	4.85%

Flat taxes offer simplicity, but may benefit higher earners more than lower-income residents.

📈 Progressive Tax States – Top Rates for 2025

In these states, your tax rate increases as your income goes up. Below are the top marginal rates:

State	Top Rate (2025)	Notes
California	13.3%	Applies to income over $1 million
New York	10.9%	Top bracket for high earners
New Jersey	10.75%	Kicks in at $1 million+
Hawaii	11%	Starts at $200,000+
Oregon	9.9%	Applies to higher income tiers
Minnesota	9.85%	One of the highest in the Midwest
Vermont	8.75%	Progressive brackets apply

These states often have multiple tax brackets and deductions that adjust based on income.

📉 States with Lower Progressive Rates

Some states still use brackets but cap their top rates lower than others:

State	Top Rate (2025)
Arizona	2.5% (flat in 2025)
Georgia	5.75%
Missouri	4.95%
New Mexico	5.9%
Virginia	5.75%

Arizona has shifted to a flat tax model in 2025, simplifying its tax structure.

🗺️ Why State Tax Rates Matter

Knowing the state income tax rates in 2025 can help you:

• Compare net salaries across job offers

• Choose where to live based on tax savings

• Plan for retirement or remote work more efficiently

For example, a $100,000 salary in Texas may stretch further than in California after taxes.

💡 Tax Planning Tips for 2025

   

• Use State Tax Calculators: They provide accurate after-tax income projections.

• Adjust Withholdings: Avoid underpaying or overpaying during the year.

• Factor in All Local Taxes: Some cities (like NYC) add local income taxes.

• Consider Moving: Remote work now gives more flexibility to choose low-tax states.

✅ Conclusion

In 2025, state income tax rates continue to vary widely across the U.S. Whether you live in a tax-free haven or a high-tax state, understanding the current rates helps you make smarter financial choices.

Bookmark this state-by-state guide to US income tax rates 2025 to stay informed and ahead in your planning.