Top Marginal State Income Tax Rates 2025

[Midpack]

Evidently deemed not useful. Even though I pointed to total tax burden as a better metric.

 

[Dash man]

PA’s income tax is reasonable, especially with the deductions it offers for giving to 529 plans and donations to Catholic and other parochial schools.
Property taxes are getting pretty high in my area.

 

[Out-to-Lunch]

Top marginal rates aren't that informative. Take NY: it looks very bad on that map, but the top rate only kicks in at $25,000,001 and higher (MFJ). For my income level, WI and NY and CA are about the same.

 

[jebmke]

leaves out the local income tax so not useful for some states

 

[audreyh1]

No state income tax here. Yet because we live in a LCOL area and a modest home with discounts our property taxes aren’t high either. So it really depends.

Some states have pretty high thresholds for income taxes especially for over 65, or exemptions for certain types of retirement income. DF never paid GA state tax even though he had pretty generous pension plus SS.

 

[Koolau]

Some states (including mine) have very high potential state income tax but exempt a lot of income. We pay no state tax on SS or pension or part of employer sponsored (401(k)) plans. Our mix of income leads to a very small state tax bill. If we w*rked, everything would be a lot worse. We're also blessed with a low RE tax (ours has never exceeded $2K/year).

I'm sure in most states, residents learn the various hacks to lower their state taxes.

 

[Al18]

Pure clickbait IMHO. The article refers to 2025 State Individual Income Tax Rates & Brackets

Being a NJ homeowner for decades, if you live in central or south Jersey, not at the shore, NJ is the 2nd most affordable state in the North East, tied with PA in my opinion. Delaware has lower taxes. I’m basing my guidance on NJ income tax, property tax and homeowners insurance. I have extended family in some of these states.

 

[Out of Steam]

Virginia's state income tax is flat in all but name. It reaches 5.0% at $5,000 income and 5.75% at $17,000 for both single and joint filers.

 

[Koolau]

Pure clickbait IMHO. The article refers to 2025 State Individual Income Tax Rates & Brackets

Being a NJ homeowner for decades, if you live in central or south Jersey, not at the shore, NJ is the 2nd most affordable state in the North East, tied with PA in my opinion. Delaware has lower taxes. I’m basing my guidance on NJ income tax, property tax and homeowners insurance. I have extended family in some of these states.

Yes, overall taxes due to living in a state typically have many angles - some of which can be favorably affected by the resident.

Top marginal rate is good to know, but if there were only some way to predict one's mix of taxes prior to moving to a new state, it would be more useful.

I suppose a trusted tax preparer could come up with an estimate. For quite a while, my tax preparer had to prepare taxes for my state plus my old state, so they do have access to the ins and outs of all the states and how certain income affects the bottom line.

 

[Al18]

In NJ, the top income tax rate kicks in at $1 Million dollars per year. This is a really, really small number of people and a poor indicator of the overall tax rate in NJ.

By comparison, I’m over 60 and at the top of the 12% tax bracket. I’ve been retired for 6 years and my NJ income tax average is under $700 per year.

 

[Gumby]

The regular top marginal rate in Connecticut is 6.99% for state AGI over $1,000,000 (MFJ). However, there are a variety of cliffs and tiers for various credits, deductions and exemptions that can cause your marginal rate to exceed that at times. My state tax return is substantially more complicated than my federal tax return, and projecting the result of various financial maneuvers, like Roth conversions, is much more time consuming.

 

[Koolau]

The regular top marginal rate in Connecticut is 6.99% for state AGI over $1,000,000 (MFJ). However, there are a variety of cliffs and tiers for various credits, deductions and exemptions that can cause your marginal rate to exceed that at times. My state tax return is substantially more complicated than my federal tax return, and projecting the result of various financial maneuvers, like Roth conversions, is much more time consuming.

I was so surprised at how simple ours is. It's pretty much take your FED1040 and subtract out a few things. Very handy.

 

[aja8888]

I was so surprised at how simple ours is. It's pretty much take your FED1040 and subtract out a few things. Very handy.

Mine is simpler than yours!

 

[Koolau]

Mine is simpler than yours!

Yes, but I have no cliffs or land mines to look out for.

 

[phil1ben]

PA’s income tax is reasonable, especially with the deductions it offers for giving to 529 plans and donations to Catholic and other parochial schools.
Property taxes are getting pretty high in my area.

Also live in PA (Bucks County). Moved 17 years ago to escape NJ income tax rates, as did many in Bucks County (on the border of NJ and and PA). The real benefit (at least in Bucks County) is that they do not reassess real estate even on a sale so my assessment has not changed in 17 years and will not change. Have no idea why or how this is constitutional but not for me to litigate. So although taxes increase each year with the school, county and municipal budgets, we do not suffer the reshuffle caused by a reassessment.

Don't get me wrong. I think it would be proper to reassess but I'll accept the hand I am dealt.

 

[Al18]

The property taxes don’t change much for me. Over the past 20 years, increases average 2% per year. Over the last 3 years, property taxes have dropped 21% with the Anchor rebate - $1500 per year.

 

[MarieIG]

Evidently deemed not useful. Even though I pointed to total tax burden as a better metric.

IMHO, it was of interest, although of course there are additional factors (i.e. city/ local income tax as previously noted) for some to consider.

 

[jazz4cash]

Also live in PA (Bucks County). Moved 17 years ago to escape NJ income tax rates, as did many in Bucks County (on the border of NJ and and PA). The real benefit (at least in Bucks County) is that they do not reassess real estate even on a sale so my assessment has not changed in 17 years and will not change. Have no idea why or how this is constitutional but not for me to litigate. So although taxes increase each year with the school, county and municipal budgets, we do not suffer the reshuffle caused by a reassessment.

Don't get me wrong. I think it would be proper to reassess but I'll accept the hand I am dealt.

I think PA gets a ton of MD Fed Gov’t retirees cause their pensions are exempt. MD rates are on the high side but not as onerous as some others. We can exempt a chunk of pension or SS (but not both).

 

[aja8888]

Yes, but I have no cliffs or land mines to look out for.

Kind of a strange thing to say? I have none either.

 

[TickTock]

My state tax return is substantially more complicated than my federal tax return, and projecting the result of various financial maneuvers, like Roth conversions, is much more time consuming.

I am not doubting you. Just really surprised, as our two state returns have far less pages of paper than our federal return.

 

[Gumby]

I am not doubting you. Just really surprised, as our two state returns have far less pages of paper than our federal return.

There are indeed fewer pages in the state return, but the calculation is much more difficult.

To figure my CT state taxes, I start with federal AGI. Then there are a variety of additions. Followed by a variety of subtractions like interest on US obligations, a social security adjustment since some, but not all, of social security is taxed by the state and how much depends on your income; an adjustment for some pension income, which phases out by income in 10 different steps; an adjustment for taxable IRA income which also phases out in 10 different steps and is not the same percentage as pensions. And that subtraction is also in the middle of a multi-year percentage phase in. After the additions and subtractions, I arrive at the CT AGI. Using that, I have to find my personal exemption from a table that has 24 different steps (that are not the same as the prior adjustment steps) to get my state taxable income. Then I figure out the provisional tax, which is relatively straightforward. But then I have to calculate my "phaseout addback" which has 10 different steps, all different than all previous steps. After that, I have to calculate my personal tax credit, which ranges from 75% to 0% depending on where I fall in the range of 28 steps of income (all different from prior steps) and subtract that from my provisional tax. Then I have to calculate from an 8 step table what amount of my property tax, from 0 to $300, gets credited to my income tax .

So, if I know I'm in the 22% federal tax bracket and contemplating a $10k tIRA withdrawal toward the end of the year, I know that I'll pay $2200 more in federal tax. However, I can't tell how much more CT state tax I'll pay without prolonged calculation.

 

[Al18]

Gumby, doesn’t TurboTax (or whatever tax program you are using) perform all the calculations for you?

 

[TickTock]

Holy crap!

There are indeed fewer pages in the state return, but the calculation is much more difficult.

[snip the excellent, detailed explanation]

Holy crap! I better start looking at my state taxes more closely.

 

[Gumby]

Gumby, doesn’t TurboTax (or whatever tax program you are using) perform all the calculations for you?

Yes, it will, but that isn't much help for planning the year ahead or easily contemplating the tax effects of financial transactions on the fly.

 

[niven]

In Virginia, I need to start with the federal AGI as well. All captital gains and qualified dividends are treated as ordinary income.

Subtract federally taxable SS (no taxes on SS at all).

Subtract an age 65 and over deduction of $12,000 per person 65 and over. But that is based on the federal AGI minus the taxable SS above, and the deduction reduces dollar for dollar over $75,000 (so totally phases out at $99,000 for MFJ with both 65 and over).

Add in any federally exempt interest unless it is also state exempt.

Subtract all interest on US obligations.

After that, then I can subtract the standard deduction of $17,000 as well and a personal exemption of $930 per person and yet another exemption of $800 per person 65 and over.

That finally gives me my taxable income for Virginia.

As mentioned before, the max taxable rate is 5.75% for the taxable income over $17,000.
The lower brackets add up to $720 in taxes.

Then Virginia has the spouse tax adjustment for MFJ which lower taxes if the spouse has significant income other than SS. It is supposed to allow married couples to file jointly without paying higher taxes than if they had filed separately. There are calculations for it but it maxes out at a $259 tax credit.

I put all this is in my spreadsheet for taxes so I can estimate the effect if I withdraw more. I update my spreadsheet at the beginning of each year with fed and state updated brackets, etc. Virginia doesn't make many changes though.