Income Tax by State: 2026 Rates and Residency Rules

The state income tax map has moved fast. In the last three years, Ohio flattened to 2.75%, Georgia cut to 4.99%, North Carolina to 3.99%, Mississippi to 4.0%, and New Hampshire finished repealing its interest and dividends tax, making it a true no-income-tax state. This page is the 2026 snapshot: who charges nothing, who charges a flat rate, who charges the most, and, more importantly, the residency and sourcing rules that determine which state’s table applies to you.

A rate table answers less than people expect, because state tax is charged on relationships, not just addresses. Your resident state taxes everything you earn everywhere; states where you work tax what you earn there; credits reconcile the overlap. The second half of this guide covers those mechanics, which are the same ones that decide remote-work, relocation, and multi-state professional questions.

Nine states levy no individual income tax on wages for 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire earned its unqualified spot recently: its tax on interest and dividends was fully repealed effective January 1, 2025.

Washington carries the big caveat: it levies a capital gains excise tax of 7% on the first $1 million of taxable Washington gains and 9.9% above $1 million, with real estate exempt. High-equity households should not treat Washington as tax-free. The other eight impose no broad tax on wages, investment income, or retirement income, though every one of them levies property tax and most lean harder on sales or severance taxes.

• Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Wyoming: no individual income tax.
• New Hampshire: no income tax; interest and dividends tax fully repealed effective 2025.
• Washington: no wage income tax, but a 7% / 9.9% capital gains excise tax on large gains.

A wave of conversions and phasedowns has made flat taxes the center of gravity. The 2026 highlights: Ohio completed its flatten to a single 2.75% rate (above a $26,050 exempt amount), North Carolina reached 3.99%, Georgia reached 4.99%, Mississippi reached 4.0% with further cuts scheduled from 2027, Iowa holds at 3.8%, and Louisiana at 3%.

Flat does not mean identical. Pennsylvania allows no standard deduction, so 3.07% applies from the first dollar; Georgia exempts the first $15,000 single / $30,000 married; Ohio exempts the first $26,050 outright; Colorado starts from federal taxable income so the federal standard deduction flows through. Two states with similar rates can produce very different effective rates at modest incomes.

California leads with a 13.3% top statutory rate (12.3% plus a 1% surcharge on taxable income over $1 million), and its uncapped 1.3% employee SDI pushes the true marginal cost on wages to roughly 14.6%. Hawaii follows at 11%, New York at 10.9%, then New Jersey and the District of Columbia at 10.75%, Oregon at 9.9%, and Minnesota at 9.85%.

Top rates start high up: New York’s 10.9% begins at $25 million of taxable income, its 9.65% at about $1.08 million for singles, and New Jersey’s 10.75% at $1 million. The rate a $250,000-to-$500,000 professional actually faces is 6.85% in New York, 6.37% in New Jersey, and 9.3% to 10.3% in California. Local layers raise it further where they apply: up to 3.876% in New York City for a combined top of 14.776%.

Rule one: your domicile state taxes all your income, everywhere. Domicile is your permanent home as shown by conduct, and changing it requires moving the life, not just the mailbox. Many states add statutory residency: keep a home there and spend more than 183 days, and you are taxed as a resident even if domiciled elsewhere, a trap for split-year households.

Rule two: work states tax income earned within them, through nonresident returns. Wages follow where work is physically performed; five states led by New York apply convenience-of-the-employer rules that source remote days to the employer’s state. Business income apportions by the business’s own footprint, and reciprocity agreements between certain neighboring states (covering W-2 wages only) let commuters skip the two-return exercise.

Rule three: the resident credit reconciles the overlap, capped at the home state’s tax on the doubly-taxed income, so you net-pay the higher rate. Rule four: local income taxes (New York City, Philadelphia, Ohio municipalities and school districts, and others) often sit outside the credit system entirely and stack on top. Any relocation or remote-work analysis that skips rule four understates the high-tax side.

Two miniatures show the credit working in both directions. A New Jersey resident earning $150,000 in Manhattan pays New York about $8,282 under its 2026 brackets; New Jersey would have charged about $7,429, so its credit stops there and the taxpayer nets the higher New York amount. Flip the rates: an Illinois resident earning $50,000 on a Texas project owes Texas nothing, and Illinois simply collects its flat 4.95%, $2,475. The pattern generalizes: work-state rate above home-state rate, you pay the work state’s rate; below it, the home state back-fills to its own. The only ways to actually lower the total are to change where income is sourced or where you are resident, which is why rate-table shopping without a sourcing plan disappoints.

The rate table matters most for genuinely mobile income: a retiree choosing where to draw down accounts, a remote employee whose employer has no convenience rule, a locum physician choosing a base state. It matters least when income is anchored: a surgeon employed by one hospital, an owner whose business operates in one state, a partner whose firm allocates income by office. For anchored income, sourcing rules make the location decision for you.

Rates also move annually now: multiple states have scheduled or revenue-triggered cuts in progress. Verify the current year’s figure against the state revenue department before acting on any table, including this one, and check our state-specific calculator pages for the eleven states we cover in depth.

Who should turn this landscape into a projection? Anyone whose income touches three or more states in a year (locum physicians, travel clinicians, consultants), anyone planning a residency change with equity or a business attached, and any remote worker whose employer sits in a convenience-rule state. A typical engagement from our multi-state practice: a telepsychiatrist domiciled in Georgia, licensed in five states, seeing patients remotely for platforms based in New York and California. Her physical work happens in Georgia, so most income sources there, but the New York platform’s convenience-rule posture, the occasional on-site week, and the platforms’ 1099 reporting each need a documented position. The rate table starts that conversation; the sourcing file finishes it.