Most states in the United States impose state income tax, which you additionally pay for to federal income tax. However, depending on what you live in, the income tax rate of your country can drop in early 2025.
Tax rates vary from state to state, but they always include collecting part of your income from each salary. The collected percentage can vary considerably depending on where you live and How much do you do. The highest rate in the United States is 13.3% collected in California from those who make over $ 1 million a year, while states, including Alaska, Florida and Nevada, do not collect income tax at all.
If you live in one of the nine specific states, however, you will probably see that your salary of home taking a little is increasing, as lawmakers in those states reduce the profit tax rates by January 1. Some of these reductions are minimal, while others are a little more substantial.
Read all the details of which states have reduced income tax rates and how much. For more in the tax season, find out If you have the right to ask for a children's tax credit And see What can the future have the loan and its value.
Which states have reduced income tax rates?
Since January 1, the reduction of the income tax rate has come into force in the following nine countries:
- Indiana
- Iowa
- Louisiana
- Mississippi
- Missouri
- Nebraska
- New Mexico
- North Carolina
- West Virginia
How much are the income tax rates in these countries reduced?
Indiana observed one of the more minimum reductions, with the income tax rate decreasing from 3.05% to 3% in 2025.
Iowa It falls at a flat income tax rate by 3.8% in 2025, which is a decrease from the highest rate of 5.7% last year.
Louisiana It also moves to a flat rate from a profit -tax graduate system, with a flat rate of 3% this year, which is a decrease from the highest rate of 4.25% in 2024. Those in the largest state income bracket, $ 30,000 -40,000 USD, will pay only 338 USD annually in income taxes.
Mississippi The tax rate recorded a minimum decrease by 2025, which is 4.4% from 4.7% last year. Officials out there have also set a goal to eventually eliminate income taxes in the country together.
Missouri is another state with a smaller decrease this year, which is 4.7% from 4.8%.
Nebraska The income tax rate was reduced to 5.2%, which is a decrease of 5.84% last year.
New Mexico It will retain its graduate income tax rate, with two of its six income brackets that note in 2025. Those who have less than $ 5,500 a year recorded a reduced rate of 1.5% from 1.7%, while those that make between $ 16,500 and $ 33,500 see their decrease to 4.3% from 4.7%.
North Carolina The rate dropped to 4.5%, which is a decrease of 4.75% last year. The state also plans to reduce the rate to 3.99% in 2026.
In West VirginiaResidents can expect to pay 4% less in total income taxes in 2025, although no specific rates have been reported. The state is another where lawmakers also exposed the goal of eventually paying together with income taxes.
For more, find out If you are entitled to a loan of savings.