Which states have no state income tax?

Nine states levy no state income tax on wages in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes interest and dividends only, not wages. Workers in these states still pay federal income tax and FICA (Social Security and Medicare). Some still face local taxes or state-mandated worker contributions like Washington Cares.

How does state income tax show up on a pay stub?

State income tax appears as a separate withholding line, usually labeled with the two-letter state code or “SIT” (State Income Tax). The amount is calculated against the state-specific withholding tables, using the state version of a W-4 (e.g., DE 4 in California, IT-2104 in New York). Pre-tax 401(k) and Section 125 health premiums usually reduce state-taxable wages, the same way they reduce federal taxable wages.

Which states use flat rates and which use brackets?

About a dozen states use a single flat rate (Pennsylvania 3.07%, Illinois 4.95%, Colorado 4.40%, North Carolina 4.5%, Michigan 4.25%, Indiana 3.05%, Kentucky 4.0%, Utah 4.55%, Mississippi 4.7%, Idaho 5.695%, Arizona 2.50%). The remaining states (and DC) run progressive brackets that look similar in structure to federal brackets, with rates that climb from about 1% to 13.3% (California top rate, plus 1% mental health surcharge over $1M).

What is local income tax?

A handful of cities, counties, and school districts add their own income tax on top of state tax. The biggest examples are New York City and Yonkers (NY), Philadelphia (PA Earnings Tax), Detroit (MI), the Ohio RITA and CCA city/school-district network, several Indiana counties, several Maryland counties, Wilmington (DE), Kansas City (MO), and St. Louis (MO). PayslipIQ has a dedicated Local Tax Calculator at /us/local-paycheck-taxes/.

What if I work in one state but live in another?

Some pairs of states have reciprocity agreements that let you pay tax only in your state of residence (e.g., Pennsylvania and New Jersey, Indiana and Kentucky, Maryland and Virginia, Wisconsin and Illinois). Others, like New York and New Jersey, do not have reciprocity, and you may owe tax to both states with a credit on the home-state return. See PayslipIQ’s remote-worker state tax guide and verify with your state tax authority or a CPA.

Why does my paycheck show two different state taxes?

Two reasons. First, you might have moved mid-year, and the employer is withholding for two states until the W-4 update is processed. Second, your employer may have a multi-state nexus and follows the apportionment rules of both states. Verify with payroll if the split looks wrong.

USA · 2026

State Income Tax on Your Paycheck

How state income tax works on a US paycheck, in plain English. Nine no-tax states. About a dozen flat-rate states. The rest use progressive brackets. Some cities and counties add a local tax on top.

Reviewed by PayslipIQ Editorial Team, in-house payroll editor

Last reviewed May 2026 · Editorial standards

Direct answer

State income tax is a separate withholding line on your US pay stub, calculated against your state’s own tables using a state-specific W-4. Nine states levy no income tax on wages. The rest use either a single flat rate or progressive brackets. Pre-tax 401(k), HSA, and Section 125 health premiums usually reduce state-taxable wages. Some cities add a local income tax on top.

No state income tax (9 states)

Alaska Florida Nevada New Hampshire South Dakota Tennessee Texas Washington Wyoming

Flat-rate states

Arizona2.50%Colorado4.40%Idaho5.695%Illinois4.95%Indiana3.05%Kentucky4.0%Michigan4.25%Mississippi4.7%North Carolina4.5%Pennsylvania3.07%Utah4.55%

Local income tax

A handful of jurisdictions levy a local income tax on top of state tax. Common examples: New York City and Yonkers, Philadelphia, Detroit, the Ohio RITA and CCA networks, several Indiana and Maryland counties, Wilmington, Kansas City, and St. Louis.

Local Paycheck Tax Calculator →

Frequently asked

Which states have no state income tax?: Nine states levy no state income tax on wages in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes interest and dividends only, not wages. Workers in these states still pay federal income tax and FICA (Social Security and Medicare). Some still face local taxes or state-mandated worker contributions like Washington Cares.
How does state income tax show up on a pay stub?: State income tax appears as a separate withholding line, usually labeled with the two-letter state code or “SIT” (State Income Tax). The amount is calculated against the state-specific withholding tables, using the state version of a W-4 (e.g., DE 4 in California, IT-2104 in New York). Pre-tax 401(k) and Section 125 health premiums usually reduce state-taxable wages, the same way they reduce federal taxable wages.
Which states use flat rates and which use brackets?: About a dozen states use a single flat rate (Pennsylvania 3.07%, Illinois 4.95%, Colorado 4.40%, North Carolina 4.5%, Michigan 4.25%, Indiana 3.05%, Kentucky 4.0%, Utah 4.55%, Mississippi 4.7%, Idaho 5.695%, Arizona 2.50%). The remaining states (and DC) run progressive brackets that look similar in structure to federal brackets, with rates that climb from about 1% to 13.3% (California top rate, plus 1% mental health surcharge over $1M).
What is local income tax?: A handful of cities, counties, and school districts add their own income tax on top of state tax. The biggest examples are New York City and Yonkers (NY), Philadelphia (PA Earnings Tax), Detroit (MI), the Ohio RITA and CCA city/school-district network, several Indiana counties, several Maryland counties, Wilmington (DE), Kansas City (MO), and St. Louis (MO). PayslipIQ has a dedicated Local Tax Calculator at /us/local-paycheck-taxes/.
What if I work in one state but live in another?: Some pairs of states have reciprocity agreements that let you pay tax only in your state of residence (e.g., Pennsylvania and New Jersey, Indiana and Kentucky, Maryland and Virginia, Wisconsin and Illinois). Others, like New York and New Jersey, do not have reciprocity, and you may owe tax to both states with a credit on the home-state return. See PayslipIQ’s remote-worker state tax guide and verify with your state tax authority or a CPA.
Why does my paycheck show two different state taxes?: Two reasons. First, you might have moved mid-year, and the employer is withholding for two states until the W-4 update is processed. Second, your employer may have a multi-state nexus and follows the apportionment rules of both states. Verify with payroll if the split looks wrong.

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PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, accounting, employment, benefits, or payroll advice. PayslipIQ is not a CPA firm, law firm, financial advisor, payroll provider, or tax authority. Always verify your paycheck, deductions, withholdings, and tax position with your employer's payroll department, a qualified CPA, the IRS, your state tax authority, or another appropriately qualified professional. Calculations are estimates; your actual paycheck may differ based on factors specific to your employer, location, benefits elections, and personal tax situation.

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