State income taxes vary widely and can significantly impact your total tax bill. Learn how state taxes work and strategies to manage them.

State Income Tax Guide

States With No Income Tax

Currently 9 states have no individual income tax:

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming

States With Flat Income Tax

Some states tax all income at one rate:

Colorado (4.4%), Illinois (4.95%), Pennsylvania (3.07%)

States With Progressive Tax Rates

Most states use graduated rates similar to the federal system. California has the highest top rate at 13.3%.

Illinois State Income Tax

Flat rate of 4.95%
Personal exemption allowances reduce taxable income
Chicago residents also pay city income tax

State Tax Deductions

Many states conform to federal deductions but with modifications
Some states have their own credits not available federally

Multi-State Filing

If you live in one state and work in another (or moved during the year), you may need to file returns in multiple states. Reciprocity agreements between some states can simplify this.

Remote Work Tax Issues

Working remotely for a company in another state may create tax obligations in that state, depending on the rules of each state.

Moved states or work remotely? Let our team sort out your multi-state tax obligations.

State Income Tax: What You Need to Know