Do state income taxes use the same brackets as federal?

No. Each state sets its own bracket thresholds and rates, which are completely separate from the federal system. Some states have progressive brackets (like California), some have flat rates (like Illinois), and some have no income tax at all.

How State Income Taxes Work

Q: Do all states have an income tax?

No. Nine states have no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. The remaining 41 states (plus Washington D.C.) charge some form of income tax.

State Taxes3 min read·Updated for 2025

Quick Answer

State income taxes are separate from federal income tax and vary dramatically across the U.S. Nine states charge no income tax, about 14 states use a flat rate, and the rest use progressive brackets with rates ranging from under 1% to 13.3%. Your state income tax is typically the second or third largest deduction from your paycheck (after federal income tax and FICA).

The Three State Tax Systems

No Income Tax (9 States)

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Residents keep their entire salary minus federal taxes and FICA. See the full guide to no-tax states.

Flat Income Tax (~14 States)

States like Illinois (4.95%), Pennsylvania (3.07%), and Indiana (3.05%) charge the same rate regardless of income. See states with flat income tax.

Progressive Income Tax (~27 States + D.C.)

States like California (1-13.3%), New York (4-10.9%), and Oregon (4.75-9.9%) use brackets similar to the federal system, with higher rates on higher income.

How State Tax Is Calculated

Most states start with your federal adjusted gross income (AGI) and then apply state-specific adjustments:

Start with federal AGI
Add back or subtract state adjustments — Some states tax income that the federal government does not, or exclude income that is federally taxable
Apply state deductions — Many states offer their own standard deduction, which may differ from the federal amount
Apply state brackets or flat rate
Subtract state credits

Real Example With Actual Numbers

Compare $80,000 in salary across three different state systems:

California (Progressive)

State taxable income: ~$70,000 (after CA standard deduction)
Tax: 1% on first $10,412 + 2% on next chunk + 4% + 6% on higher portions
Approximate state tax: $3,200

Illinois (Flat)

State taxable income: ~$80,000
Tax: $80,000 x 4.95%
State tax: $3,960

Texas (No Tax)

State tax: $0

At $80,000, Illinois actually costs more than California because Illinois's flat 4.95% exceeds California's progressive rates at this income level. At $200,000, California would cost significantly more because its higher brackets kick in. Check your state at the SalaryHog calculator.

State Tax Withholding

Just like federal withholding, your employer withholds state income tax from each paycheck and remits it to your state's tax agency. When you start a new job, you typically fill out a state-specific withholding form in addition to the federal W-4.

Your pay stub will show state tax as a separate line item. If you live in a no-tax state, this line will be zero.

Multi-State Situations

If you live in one state and work in another, things get complicated:

Reciprocity agreements: Some neighboring states have reciprocity agreements where you only pay tax in your state of residence
Remote work: Working remotely across state lines can trigger tax obligations in multiple states
Moving mid-year: You may need to file partial-year returns in both states. See taxes when you move states

State Tax Deduction on Federal Returns

If you itemize federal deductions, you can deduct up to $10,000 in state and local taxes (SALT) on your federal return. This partially offsets the cost of living in a high-tax state, but the $10,000 cap limits the benefit for higher earners.

Compare your state's impact on your take-home pay using the SalaryHog calculator or see the difference a move would make with the relocation tool.