Forty-one states and the District of Columbia have a state income tax on wages and salaries. Nine states do not: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.1Tax Foundation. State Individual Income Tax Rates and Brackets, 2025 Among the 41 that do collect it, 16 apply a single flat rate to everyone and 25 use graduated brackets that rise with income. The District of Columbia also uses graduated brackets.
The Nine States With No Income Tax on Wages
Residents of these nine states pay no state income tax on wages or salaries:1Tax Foundation. State Individual Income Tax Rates and Brackets, 2025
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Texas and Florida go beyond simple legislative choice. The Texas Constitution expressly prohibits any tax on the net incomes of individuals,2State of Texas. The Texas Constitution Article 8 – Taxation and Revenue and Florida’s Constitution, at Article VII, Section 5, blocks any income tax on natural persons who are state residents.3The 2025 Florida Statutes. Florida Statutes Chapter 220 – Income Tax Code Adding an income tax in either state would take a constitutional amendment.
New Hampshire is the newest name on the list. It used to tax interest and dividend income under RSA 77, but that tax was phased out completely for tax years beginning after December 31, 2024.4NH Department of Revenue Administration. Interest and Dividends Tax New Hampshire residents no longer owe any state-level income tax on wages or investment returns.
One caveat about Washington. The state taxes no wages, but it does tax long-term capital gains. For 2026, the rate is 7 percent on taxable capital gains up to $1 million and 9.9 percent on amounts above that.5Washington Department of Revenue. New Tiered Rates for Washingtons Capital Gains Tax Washington classifies this as an excise tax rather than an income tax under state law.6Washington State Legislature. WAC 458-20-301 Capital Gains Excise Tax
None of these states is tax-free overall. They lean more heavily on sales taxes, property taxes, and excise taxes to raise revenue.
The 16 States With a Flat Income Tax Rate
A flat-tax state applies one rate to all taxable income. No brackets, no tiers. As of 2026, the flat-rate states are:1Tax Foundation. State Individual Income Tax Rates and Brackets, 2025
- Alabama
- Arizona
- Colorado
- Georgia
- Idaho
- Illinois
- Indiana
- Iowa
- Kentucky
- Louisiana
- Michigan
- Mississippi
- North Carolina
- Ohio
- Pennsylvania
- Utah
Rates in this group run from under 3 percent to about 5.5 percent. North Carolina’s rate dropped to 3.99 percent for tax years beginning in 2026, the last step of a multi-year phasedown.7NC Department of Revenue. Tax Rate Schedules Ohio is the newest flat-tax state, moving from graduated brackets to a single 2.75 percent rate on nonbusiness income above $26,050 starting January 1, 2026.8Ohio Legislature. Senate Bill 3 – 136th General Assembly
Illinois is a special case among the flat-tax states. Its constitution requires a flat rate and forbids graduated brackets outright.9FindLaw. Constitution of the State of Illinois Art IX Sect 3 – Limitations on Income Taxation In the other 15, the flat rate is set by the legislature and can be changed through ordinary law. Recent years have trended toward lower flat rates and toward more states converting graduated systems into single-rate ones.
The 25 States (Plus DC) With Graduated Brackets
The remaining 25 states and the District of Columbia use graduated brackets. This is the most common structure. Only the income falling inside a given bracket is taxed at that bracket’s rate, so earning a dollar into a higher tier does not push all of your income up.
The number of brackets and the size of the top rate vary a lot. California has nine brackets running from 1 percent to 12.3 percent, plus a 1 percent surcharge on income above $1 million, for a top effective rate of 13.3 percent.10CA.gov. 2025 California Tax Rate Schedules New York’s rates vary by filing status and total income. Other graduated-bracket states cap their top rates below 6 percent.
Local Income Taxes Add Another Layer
State-level answers don’t tell you the whole tax bill. Many cities and counties impose their own income taxes on top of the state’s. Local income taxes are especially common in Ohio, Pennsylvania, Kentucky, and Maryland, where hundreds of municipalities levy earned-income taxes on residents and on people who work within the jurisdiction.11Tax Policy Center. How Do State and Local Individual Income Taxes Work New York City is another well-known example, layering its own personal income tax on top of the state’s.12Office of the New York City Comptroller. The NYC Personal Income Tax Before and After the Pandemic
Even a state with no wage income tax can host local income-style levies. Seattle imposes a payroll-based tax on high earners despite Washington’s lack of a statewide wage tax. If you move, the state-level answer is only the starting point; the city or county may have rules of its own.