State Individual Income Tax Rates and Brackets, 2025

by Andrey Yushkov, Katherine Loughead, Tax Foundation, Feb, 2025

Individual income taxes are a major source of state government revenue, accounting for 33 percent of state tax collections in fiscal year 2023, the latest year for which data are available. Their significance in public policy is further enhanced by individuals being actively responsible for filing their income taxes, in contrast to the indirect payment of sales and excise taxes.

Forty-two states levy individual income taxes. Forty-one tax wage and salary income. Washington only taxes capital gains income. Eight states, including New Hampshire, which repealed its interest and dividends tax in 2025, levy no individual income tax at all.

Of those states taxing wages, 14 have single-rate tax structures, with one rate applying to all taxable income. Conversely, 27 states and the District of Columbia levy graduated-rate income taxes, with the number of brackets varying widely by state. Currently, six states—Arkansas, Kansas, Massachusetts, Montana, North Dakota, and Ohio—have a two-bracket income tax system. At the other end of the spectrum, Hawaii has 12 brackets. Top marginal rates span from 2.5 percent in Arizona and North Dakota to 13.3 percent in California. (California also imposes a 1.1 percent payroll tax on wage income, bringing the all-in top rate to 14.4 percent as of 2024.)…

Notable 2025 State Individual Income Tax Changes

Last year continued the historic pace of income tax rate reductions. In total, 28 states enacted and/or implemented individual income tax rate reductions since 2021. Only Massachusetts and the District of Columbia increased their top marginal tax rate in those years. Several changes implemented in 2024 were retroactively effective as of January 1, 2024. However, several notable changes took effect on January 1, 2025, or are set to occur on specific future dates, with rates phasing down incrementally over time. Some of the scheduled future rate reductions rely on tax triggers, where specific changes to tax rates will occur once certain revenue benchmarks are met. Notable changes to major individual income tax provisions already certified for 2025 include the following…

Hawaii

Hawaii significantly revised its individual income tax brackets under H.B. 2404, enacted in June 2024. Starting January 1, 2025, the lowest rate of 1.4 percent will apply to single-filer income below $9,600 (up from $2,400 in 2024), while the highest rate of 11 percent will apply to income exceeding $325,000 (up from $200,000). Additionally, the bill doubled the standard deduction from $2,200 to $4,400 for single filers for tax years 2024 and 2025. Despite these changes, Hawaii still has one of the most complex bracket structures in the nation, with 12 brackets. Brackets will be further widened in 2027, with additional increases to the standard deduction phased in over several years….

LINK: Download 2025 Data

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