States With a Flat Income Tax: All 17 States and 2026 Rates

Seventeen states apply a flat individual income tax for the 2026 tax year, meaning every filer pays the same percentage on taxable income no matter how much they earn. Rates run from 2.5% in Arizona to 5.7% in Kansas. Another nine states impose no personal income tax at all. The states with a flat income tax, along with each state’s current rate, are listed below.

The 17 Flat Income Tax States and Their 2026 Rates

These rates reflect enacted law as of early 2026. Some states have revenue-triggered reductions that can adjust figures later in the year.

Kentucky’s rate fell from 4% to 3.5% on January 1, 2026, after Governor Beshear signed HB 1 in early 2025. Indiana dropped from 3.05% in 2025 to 2.95% for 2026 as part of a multi-year plan, and the rate is set to fall again to 2.9% in 2027.5Indiana Department of Revenue. Rates, Fees and Penalties Louisiana and Ohio moved to flat rates from graduated brackets in recent years.

Mississippi and Ohio: Flat With an Exemption Floor

Mississippi and Ohio are flat-rate states with a built-in exemption on lower income. Mississippi taxes nothing on the first $10,000, then applies 4% above that.8Mississippi Department of Revenue. General Information Ohio exempts the first $26,050 of nonbusiness income and taxes everything above that threshold at 2.75%. In practice, both structures function as a flat tax paired with a generous standard deduction.

Illinois: The Only Constitutionally Locked Flat Tax

Illinois is the only state where the flat tax is written into the constitution. Article IX, Section 3 requires any income tax to be imposed at a non-graduated rate.11Illinois General Assembly. Illinois Constitution – Article IX Voters rejected a 2020 ballot measure that would have removed the restriction. Every other flat tax state could switch to graduated brackets through ordinary legislation.

Scheduled Rate Cuts to Watch

Several states on the list have already locked in future reductions, and some of those cuts depend on hitting revenue targets.

Georgia’s rate has been dropping each year since the state adopted its flat tax in 2024 at 5.49%. The original legislation, HB 1437, mapped out annual reductions reaching 4.99% by 2029, though the pace can slow if budget conditions tighten.12EY. Georgia Law Lowers Personal Income Tax Rates Starting in 2024 More recent legislation may accelerate the schedule.

North Carolina has been cutting its flat rate steadily since 2014, when it stood at 5.8%. The 2026 rate of 3.99% is set to drop to 3.49% in 2027 and 2.99% in 2028 if revenue projections hold.9North Carolina Department of Revenue. Tax Rate Schedules The state’s Office of State Budget and Management confirmed in March 2026 that the revenue trigger for the next cut was met.13North Carolina Office of State Budget and Management. Scheduled Income Tax Cuts to Mostly Benefit High-Income Households

Mississippi is on the most aggressive reduction path. The rate drops to 3.75% in 2027, reaches 3% by 2030, and continues declining toward full elimination of the individual income tax.8Mississippi Department of Revenue. General Information Iowa completed a major transition in 2026, consolidating its former graduated brackets into a single 3.8% rate under Senate File 2442.6Iowa Department of Revenue. IDR Announces 2026 Individual Income Tax and Interest Rates Colorado’s 4.4% rate may be retroactively reduced to 4.25% if the state meets revenue targets under Proposition 121.

States With No Individual Income Tax

Nine states impose no personal income tax at all. They fund government operations through sales taxes, property taxes, severance taxes on natural resources, or a combination.

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

New Hampshire is the newest addition. The state had long taxed interest and dividend income at 5%, but the legislature voted to phase out the tax. The repeal took full effect on January 1, 2025, and New Hampshire residents no longer owe state tax on any form of personal income.14New Hampshire Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect

Washington deserves a caveat. It does not tax wages or salary, but it does impose a capital gains tax on profits from selling stocks, bonds, and other financial assets: 7% on the first $1 million in taxable gains and 9.9% on anything above that.15Washington Department of Revenue. New Tiered Rates for Washingtons Capital Gains Tax Wage earners in Washington owe zero state income tax. Investors selling appreciated assets face a different picture.

What a Flat Rate Does Not Cover

The single state rate applies after deductions and exemptions, not to your gross income, so two people earning the same salary in the same flat tax state can still owe different amounts. The rate is uniform. The base it applies to is not.

A flat state rate also does not always mean a simple total income tax bill. Indiana layers county-level income taxes on top of its 2.95% state rate, and the county rate varies with where you live.5Indiana Department of Revenue. Rates, Fees and Penalties Colorado, Kentucky, and Michigan also have local jurisdictions that collect their own income or wage taxes. Check whether your county or city adds a percentage before budgeting for your total liability.

If you live in one flat tax state and work in another, you can owe tax in both places unless the two states have a reciprocity agreement. Illinois has reciprocity with Iowa, Kentucky, Michigan, and Wisconsin. Indiana has agreements with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. Arizona covers California, Indiana, Oregon, and Virginia. Kentucky’s list is one of the broadest, covering seven neighboring states. Without an agreement, you file a nonresident return in the work state and claim a credit on your home state return for the taxes paid there.