Understanding State Income Tax Brackets in 2026
What Is a Tax Bracket?
State income tax brackets determine how much tax you pay based on your income. Most states use progressive brackets, where income is divided into chunks and each chunk is taxed at a different rate. A few states use a flat rate where all income is taxed the same.
A common misconception is that a raise pushing you into a higher bracket means all your income gets taxed at that higher rate. In a progressive system, only the income within each bracket is taxed at that bracket's rate — not your entire income.
Progressive vs Flat
In a progressive system like California or New York, your income is divided into chunks (brackets), each taxed at a different rate. Higher portions are taxed at higher rates.
In a flat tax system like Colorado (4.4%) or Illinois (4.95%), all taxable income is taxed at the same rate regardless of how much you earn.
Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
How State Brackets Differ From Federal
States set their own brackets independently of the federal government. While federal taxes use indexed brackets that adjust annually for inflation, states vary widely in their approach. Some states like California have up to 12 brackets, while Hawaii has 12 brackets. Others have just 1 bracket (flat tax), and 9 states have no income tax at all.
Real Example: California 2026
Consider a single filer in California with $85,000 taxable income in 2026. Here is how the progressive brackets apply:
| Bracket Range | Rate | Income in Bracket | Tax Owed |
|---|---|---|---|
| $0 - $10,412 | 1% | $10,412 | $104.12 |
| $10,412 - $24,684 | 2% | $14,272 | $285.44 |
| $24,684 - $38,959 | 4% | $14,275 | $571.00 |
| $38,959 - $54,081 | 6% | $15,122 | $907.32 |
| $54,081 - $68,350 | 8% | $14,269 | $1,141.52 |
| $68,350 - $85,000 | 9.3% | $16,650 | $1,548.45 |
| **Total** | **$4,557.85** |
The marginal rate is 9.3% (the rate on the last dollar), but the effective rate is only $4,557.85 / $85,000 = 5.36%.
States With the Highest Top Rates
| State | Top Rate | Type |
|---|---|---|
| California | 13.3% | Graduated |
| Hawaii | 11% | Graduated |
| New Jersey | 10.75% | Graduated |
| Oregon | 9.9% | Graduated |
| Minnesota | 9.85% | Graduated |
| District of Columbia | 10.75% | Graduated |
| New York | 10.9% | Graduated |
How to Use Our Calculator
Instead of doing these calculations manually, use our free state income tax calculator. Enter your income and filing status, and get an instant breakdown of your taxes by bracket, your effective rate, and your total tax owed for any state.
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