State Income Tax Rates in 2026 Range From 0% to 13.3%

As of Sept. 19, 2026, state income tax rates remain one of the biggest variables in a household’s total tax picture. According to TechBullion’s state-by-state guide, the spread runs from 0% on wage income in nine states to a 13.3% top marginal rate in California, with major differences in bracket structure, deductions and local taxes underneath those headline numbers.

For affluent households, the practical takeaway is that the posted top rate often tells only part of the story. A state with a high top bracket may apply it only to very high income, while a lower flat rate can apply to nearly every taxable dollar from the start.

What Changed in the State Tax Map

The broad direction since 2021 has been toward lower rates in many states. WLKY and WBAL-TV, citing Tax Foundation data, reported in April that 23 states reduced their top marginal individual income tax rate taking effect in 2026, and seven states have shifted from graduated systems to flat-rate systems.

That leaves three basic models across the country, according to TechBullion: nine states with no tax on wage income, 15 with a single flat rate, and 26 states plus the District of Columbia with graduated brackets. The average top individual rate has started to decline and stands at 5% in 2026, WLKY and WBAL-TV reported.

Still, a falling average does not mean every high earner is paying less. WLKY and WBAL-TV also reported that Maryland, Massachusetts, New York and the District of Columbia are among the jurisdictions that have moved to raise top rates, while California remains the highest-rate state on ordinary personal income at 13.3%.

Who Is Affected Most

The rate structure matters most for households with high salaries, large bonuses, equity compensation, investment income or a possible move across state lines. TechBullion noted that New York’s 10.9% top rate does not begin until income above $25 million, while California’s 13.3% starts at $1 million. That means many high-paid professionals may face a lower marginal rate than the top figure suggests.

By contrast, some states reach their top bracket quickly. TechBullion reported that Alabama reaches 5% at $3,000 of taxable income and Oklahoma reaches 4.5% at $7,200. In those states, the difference between a graduated structure and a near-flat one may be small for many workers.

The no-tax states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. But no income tax does not mean a low overall state-and-local burden. TechBullion and WLKY both noted that states without wage taxes often lean more heavily on property taxes, sales taxes or other revenue sources. Texas and New Hampshire are associated with property tax bills that can approach 2% of a home’s value each year, while Tennessee and Washington rely heavily on sales taxes once local rates are added.

For cross-border commuters and remote workers, filing rules also matter. TechBullion reported that Pennsylvania has reciprocity agreements with New Jersey, Indiana, Maryland, Ohio, Virginia and West Virginia, while New York has no reciprocity with neighboring states. It also said New York, Delaware, Nebraska, Alabama and Pennsylvania apply a convenience-of-the-employer test that can continue taxing some remote workers based on the employer’s office location.

The After-Tax Math

For high earners, the gap between a no-tax state and a high-tax state can be material even before property, sales and local taxes are considered.

Those figures are illustrative examples, not full tax calculations. They do not account for deductions, lower brackets, local taxes or special surtaxes. But they show why the structure matters. A household comparing California with Texas may focus on a headline difference of 13.3 percentage points on wage income, while a household comparing New York with New Jersey may need to look more closely at bracket thresholds, credits and where income is sourced.

Some lower-tax states also carry hidden add-ons. TechBullion reported that Pennsylvania municipalities can impose an earned income tax, Indiana counties levy local rates, and Ohio has many municipal and school district income taxes. That means a 2.95% or 3.07% state rate may understate the real combined burden.

Moves to Discuss With Your Advisor

Households considering a move, a remote-work arrangement or a change in compensation mix may want to review more than the top published state rate. TechBullion emphasized three variables that can change the outcome: what counts as taxable income, whether local tax layers apply, and where income is sourced for residents and nonresidents.

That can be especially important for executives and business owners paid partly in stock or capital gains. Washington does not tax wages, but TechBullion reported that it taxes large realized capital gains at 7% and then 9% above $1 million of gains. Maryland adds a 2% surtax on capital gains for filers with adjusted gross income above $350,000, according to TechBullion.

Retirement income can also change the comparison. TechBullion reported that eight states tax Social Security benefits to some degree: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. West Virginia completed its phaseout this year and no longer taxes those benefits, the publication said.

For affluent families, a residency change often involves more than changing an address. TechBullion noted that moving midyear typically requires part-year returns and that states may continue to treat a taxpayer as resident until the home, driver’s license, doctors and days spent have all shifted.

What to Watch Next

The main trend remains competition among states for residents and businesses. WLKY and WBAL-TV, citing Tax Foundation analyst Nicole Fox, said the current wave of tax cuts accelerated after the pandemic, when states saw strong revenue and federal support. The question now is whether that rate-cutting cycle continues as budget conditions normalize.

Several states already have additional changes in motion. TechBullion reported that Indiana is scheduled to reach 2.90% next year, Mississippi’s 4% rate is part of a phase-down continuing through the decade, and Georgia’s 4.99% rate has revenue triggers that could move it toward 3.99%.

At the high end, WLKY and WBAL-TV reported that Washington recently passed a so-called millionaires’ tax of 9.9% on personal income over $1 million, set to take effect in 2028, while California has also seen discussion of a proposed billionaire tax ballot initiative. For now, though, the 2026 map remains clear: where income is earned, what kind of income it is and whether a household truly changed residency may matter as much as the state’s headline rate.

After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.