State Tax by Income Level Calculator
Select an income level to see all 50 states ranked by effective tax rate:
| Rank | State | Tax Amount | Effective Rate |
|---|
Best States for Low-Income Earners (Under $50K)
For earners under $50,000, the difference between states is relatively small (except no-tax states). Progressive tax states like California, where the first ~$10,000 is taxed at just 1%, can be quite affordable at low incomes. Key considerations:
- No-income-tax states are obviously cheapest ($0)
- Low flat-rate states like Arizona (2.5%) and Pennsylvania (3.07%) are very affordable
- Progressive states with generous standard deductions effectively exempt low earners
- EITC (Earned Income Tax Credit) is available in ~30 states and can make effective rates negative
Best States for High-Income Earners (Over $200K)
At high incomes, the differences between states become enormous. A person earning $500,000 pays:
- $0 in Florida, Texas, Nevada, Wyoming, South Dakota, Tennessee, Washington, Alaska, New Hampshire
- ~$15,350 in Pennsylvania (3.07% flat)
- ~$24,750 in Illinois (4.95% flat)
- ~$52,500 in California (progressive, ~10.5% effective)
- ~$48,500 in New York (progressive, ~9.7% effective, state only)
That is a $52,500 per year difference between California and Florida. Over 10 years, that is over half a million dollars in tax savings.
Best States for Retirees
Retirees have unique considerations because different states treat retirement income differently:
- Social Security: 37 states exempt Social Security benefits. States that tax it include CO, CT, MN, MT, NE, NM, RI, UT, VT, WV (most with income thresholds)
- Pensions/401(k): States like IL, MS, PA exempt all retirement income. Many others offer partial exemptions.
- Property tax: Many states offer homestead exemptions or freezes for seniors
The best overall states for retirees (combining all factors): Florida, Tennessee, Nevada, Wyoming, South Dakota, Alaska, New Hampshire, Pennsylvania, Mississippi, and Illinois.
Why Effective Tax Rate Matters More Than Top Marginal Rate
Many people compare states by looking at the top marginal tax rate, but this is misleading. The effective rate (total tax / total income) gives a much more accurate picture because:
- Progressive states only tax the highest dollars at the top rate
- Standard deductions and exemptions reduce taxable income
- Some states have credits that lower the effective rate
- At moderate incomes, a state with a 10% top rate may charge less than a state with a 5% flat rate (due to brackets)
Frequently Asked Questions
Which state has the lowest taxes at $100K income?
No-income-tax states charge $0. Among taxing states, North Dakota, Pennsylvania, Indiana, and Arizona have the lowest effective rates around 2.5-3%.
Why does effective rate matter more than top marginal rate?
The top rate only applies to income in the highest bracket. Your effective rate is total tax / total income, giving a more accurate comparison.
Which states are best for retirees?
FL, TN, NV, WY, SD, AK, NH (no income tax), plus IL, MS, PA (exempt retirement income).
Do high earners pay much more in progressive states?
Yes. At $500K, the difference between CA (~$52K) and TX ($0) is $52K/year, or $520K over 10 years.
When does the SALT cap matter?
Typically at household income $100K+ in high-tax states. See our SALT deduction guide.