State Individual Income Tax Rates And Brackets For 2019

FISCALFACTNo. 643Mar. 2019State Individual Income Tax Ratesand Brackets for 2019Katherine LougheadPolicy AnalystEmma WeiResearch AssistantKey Findings Individual income taxes are a major source of state government revenue,accounting for 37 percent of state tax collections. Forty-three states levy individual income taxes. Forty-one tax wage andsalary income, while two states–New Hampshire and Tennessee–exclusivelytax dividend and interest income. Seven states levy no income tax at all. Of those states taxing wages, nine have single-rate tax structures, with onerate applying to all taxable income. Conversely, 32 states levy graduated-rateincome taxes, with the number of brackets varying widely by state. Hawaiihas 12 brackets, the most in the country. States’ approaches to income taxes vary in other details as well. Some statesdouble their single-bracket widths for married filers to avoid the “marriagepenalty.” Some states index tax brackets, exemptions, and deductions forinflation; many others do not. Some states tie their standard deductions andpersonal exemptions to the federal tax code, while others set their own oroffer none at all.The Tax Foundation is the nation’sleading independent tax policyresearch organization. Since 1937,our research, analysis, and expertshave informed smarter tax policyat the federal, state, and locallevels. We are a 501(c)(3) nonprofitorganization. 2019 Tax FoundationDistributed underCreative Commons CC-BY-NC 4.0Editor, Rachel ShusterDesigner, Dan CarvajalTax Foundation1325 G Street, NW, Suite 950Washington, DC 20005202.464.6200taxfoundation.org

TA X FOUNDATION 2Individual income taxes are a major source of state government revenue, accounting for 37 percentof state tax collections.1 Their prominence in public policy considerations is further enhanced by thefact that individuals are actively responsible for filing their income taxes, in contrast to the indirectpayment of sales and excise taxes.Forty-three states levy individual income taxes. Forty-one tax wage and salary income, while twostates–New Hampshire and Tennessee–exclusively tax dividend and interest income. Seven stateslevy no income tax at all. Tennessee is currently phasing out its Hall Tax (income tax applied onlyto dividends and interest income) and is scheduled to repeal its income tax entirely for tax yearsbeginning January 1, 2021.2Of those states taxing wages, nine have single-rate tax structures, with one rate applying to alltaxable income. Conversely, 32 states levy graduated-rate income taxes, with the number of bracketsvarying widely by state. Kansas, for example, imposes a three-bracket income tax system. At theother end of the spectrum, Hawaii has 12 brackets, and California has 10. Top marginal rates rangefrom North Dakota’s 2.9 percent to California’s 13.3 percent.In some states, a large number of brackets are clustered within a narrow income band; Georgia’staxpayers reach the state’s sixth and highest bracket at 7,000 in annual income. In the District ofColumbia, the top rate kicks in at 1 million, as it does in California (when the state’s “millionaire’s tax”surcharge is included). New York and New Jersey’s top rates kick in at even higher levels of marginalincome: 1,077,550 and 5 million, respectively.States’ approaches to income taxes vary in other details as well. Some states double their singlebracket widths for married filers to avoid the “marriage penalty.” Some states index tax brackets,exemptions, and deductions for inflation; many others do not. Some states tie their standarddeductions and personal exemptions to the federal tax code, while others set their own or offer noneat all. In the following table, we provide the most up-to-date data available on state individual incometax rates, brackets, standard deductions, and personal exemptions for both single and joint filers.The 2017 federal tax reform law increased the standard deduction (set at 12,200 for single filersand 24,400 for joint filers in 2019), while suspending the personal exemption by reducing it to 0through 2025. Because many states use the federal tax code as the starting point for their ownstandard deduction and personal exemption calculations, some states that coupled to the federaltax code updated their conformity statutes in 2018 to either adopt federal changes or retain theirprevious deduction and exemption amounts.1U.S. Census Bureau, “State & Local Government Finance,” Fiscal Year 2016, al/public-use-datasets.html.2Tennessee Department of Revenue, “Hall Income Tax Notice,” May 2017. s/notices/income/income17-09.pdf.

TA X FOUNDATION 3Notable Individual Income Tax Changes in 2019Several states changed key features of their individual income tax codes between 2018 and 2019.These changes include the following: As part of a broader tax reform package, Kentucky replaced its six-bracket graduated-rateincome tax, which had a top rate of 6 percent, with a 5 percent single-rate tax. 3 New Jersey created a new top rate of 10.75 percent for marginal income 5 million and above. 4 In adopting legislation to conform to changes in the federal tax code, Vermont eliminated itstop individual income tax bracket and reduced the remaining marginal rates by 0.2 percentagepoints across the board.5 Iowa adopted comprehensive tax reform legislation with tax changes that phase in over time.For tax year 2019, income tax rates are reduced across the board, and in 2023, subject torevenue triggers, nine brackets will be consolidated into four, with the top rate reduced to 6.5percent. 6 Idaho adopted conformity and tax reform legislation that included a 0.475 percentage pointacross-the-board income tax rate reduction.7 Missouri eliminated one of its income tax brackets and reduced the top rate from 5.9 to 5.4percent as part of a broader conformity and tax reform effort. 8 Utah reduced its single-rate individual income tax from 5 to 4.95 percent.9 Arkansas is unique among states in that it has three entirely different rate schedules dependingon a taxpayer’s total taxable income. In 2018, Arkansas adopted low-income tax relieflegislation that reduced marginal rates in the lowest-income schedule, as well as the lowest ratein the next income schedule.10 Georgia reduced its top marginal individual income tax rate from 6 to 5.75 percent as part ofa conformity measure, but this provision is set to expire at the end of 2025 when income taxchanges are scheduled to sunset at the federal level.11 North Carolina’s flat income tax was reduced from 5.499 to 5.25 percent.123Morgan Scarboro, “Kentucky Legislature Overrides Governor’s Veto to Pass Tax Reform Package,” Tax Foundation, April 16, 2018, age/.4Ben Strachman and Scott Drenkard, “Business and Individual Taxpayers See No Reprieve in New Jersey Tax Package,” Tax Foundation, July 3, 2018, rporate-tax-hike-new-jersey/.5Jared Walczak, “Toward a State of Conformity: State Tax Codes a Year After Federal Tax Reform,” Tax Foundation, Jan. 28, 2019, r-after-tcja/.6Jared Walczak, “What’s in the Iowa Tax Reform Package,” Tax Foundation, May 9, 2018, ckage/.7Katherine Loughead, “Five States Accomplish Meaningful Tax Reform in the Wake of the Tax Cuts and Jobs Act,” Tax Foundation, July 23, 2018, d Walczak, “Toward a State of Conformity: State Tax Codes a Year After Federal Tax Reform.”9Ibid.10Nicole Kaeding, “Tax Cuts Signed in Arkansas,” Tax Foundation, Feb. 2, 2017, /.11Jared Walczak, “Tax Changes Taking Effect January 1, 2019,” Tax Foundation, Dec. 27, 2018, y-2019/.12Ibid.

TA X FOUNDATION 4How High Are Income Tax Rates in Your State?Top State Marginal Individual Income Tax Rates, %MSAL5.00% 5.00%ME7.15%NYNY8.82%8.82%MI*4.25%IL*IN*4.95% 3.23%NH**5.00%SC7.00%GA5.75%LA6.00%FLHI11.00%Note: (*) State has a flat income tax. (**)State only taxes interest and dividends income.Map shows top marginal rates: the maximum statutory rate in each state. This map does notshow effective marginal tax rates, which would include the effects of phase-outs of varioustax preferences. Local income taxes are not included.Source: Tax Foundation; state tax statutes, forms, and instructions; Bloomberg BNA.TAX FOUNDATIONTop State Marginal IndividualIncome Tax RateLowerHigher

TA X FOUNDATION 5State Individual Income Tax Rates and Brackets for 2019Single FilerStateRatesMarried Filing JointlyBracketsRatesBracketsAla.2.00% 02.00% 0(b, f, gg)4.00% 5004.00% 1,0005.00% 3,0005.00% 6,000AlaskanonenoneAriz.2.59% 02.59% 0(e, h)2.88% 11,0472.88% 22,0923.36% 27,6143.36% 55,2264.24% 55,2264.24% 110,4504.54% 165,6744.54% 331,3460.90% 00.90% 0(d, e, r, bb) 2.50% 4,5002.50% 4,5003.50% 8,9003.50% 8,9004.50% 13,4004.50% 13,4005.00% 22,2005.00% 22,2006.90% 37,2006.90% 37,200Calif.1.00% 01.00% 0(a, e, r, s,ff, hh)2.00% 8,5442.00% 17,0884.00% 20,2554.00% 40,5106.00% 31,9696.00% 63,9388.00% 44,3778.00% 88,7549.30% 56,0859.30% 112,17010.30% 286,49210.30% 572,98411.30% 343,78811.30% 687,57612.30% 572,98012.30% 1,000,00013.30% 1,000,00013.30% 1,145,960Ark.Colo.4.63% of federaltaxable income withmodification4.63% of federaltaxable income withmodificationConn.3.00% 03.00% 0(t, u, bb)5.00% 10,0005.00% 20,0005.50% 50,0005.50% 100,0006.00% 100,0006.00% 200,0006.50% 200,0006.50% 400,0006.90% 250,0006.90% 500,0006.99% 500,0006.99% 1,000,000Del.2.20% 2,0002.20% 2,000(r, v, gg,hh)3.90% 5,0003.90% 5,0004.80% 10,0004.80% 10,0005.20% 20,0005.20% 20,0005.55% 25,0005.55% 25,0006.60% 60,0006.60% 60,000Standard DeductionPersonal ExemptionSingleCoupleSingleCoupleDependent 2,500 7,500 1,500 3,000 1,000n.a.n.a.n.a.n.a.n.a. 5,535 11,059 2,292 4,585 2,292 2,200 4,400 26 26 26 4,401 8,802 118 236 367 12,200 24,400n.a.n.a.n.a.n.a.n.a. 15,000 24,000 0 3,250 6,500 110 220 110

TA X FOUNDATION 6State Individual Income Tax Rates and Brackets for 2019, ContinuedSingle FilerMarried Filing .00% 01.00% 02.00% 7502.00% 1,0003.00% 2,2503.00% 3,0004.00% 3,7504.00% 5,0005.00% 5,2505.00% 7,0005.75% 7,0005.75% 10,000Hawaii1.40% 01.40% 0(w, hh)3.20% 2,4003.20% 4,8005.50% 4,8005.50% 9,6006.40% 9,6006.40% 19,2006.80% 14,4006.80% 28,8007.20% 19,2007.20% 38,4007.60% 24,0007.60% 48,0007.90% 36,0007.90% 72,0008.25% 48,0008.25% 96,0009.00% 150,0009.00% 300,00010.00% 175,00010.00% 350,00011.00% 200,00011.00% 400,000Idaho1.125% 01.125% 0(e, p, z)3.125% 1,5413.125% 3,0813.625% 3,0813.625% 6,1624.625% 4,6224.625% 9,2435.625% 6,1625.625% 12,3246.625% 7,7036.625% 15,4056.925% 11,5546.925% 23,108noneStandard DeductionPersonal n.a.n.a.n.a. 4,600 6,000 2,700 7,400 3,000 2,200 4,400 1,144 2,288 1,144 12,200 24,400n.a.n.a.n.a.Ill. (dd, hh) 4.95% 04.95% 0n.a.n.a. 2,275 4,550 2,275Ind.3.23% 03.23% 0n.a.n.a. 1,000 2,000 1,000Iowa0.33% 00.33% 0 2,080 5,120 40 80 40(e, f, r, gg)0.67% 1,6380.67% 1,6382.25% 3,2762.25% 3,2764.14% 6,5524.14% 6,5525.63% 14,7425.63% 14,7425.96% 24,5705.96% 24,5706.25% 32,7606.25% 32,7607.44% 49,1407.44% 49,1408.53% 73,7108.53% 73,7103.10% 2,5003.10% 5,000 3,000 7,500 2,250 4,500 2,2505.25% 15,0005.25% 30,0005.70% 30,0005.70% 60,000(x, gg, hh)Kans. (hh)