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A look at 2020 and 2021 state individual income tax rates and income brackets

February 20, 2021

Texans map of the USA

In addition to working on federal tax returns for the 2020 tax year, taxpayers in most of the United States also must file state taxes.

I used to do that when we lived in Maryland. But I’ve also spent most of my combined taxpaying life in Florida and my native and current home in Texas, two states without personal income taxes.

Still, I remember the hassle, both of filing and paying from my days in the Old Line State. And I feel for all y’all dealing with dual — or more, thanks to changed 2020 work situations due to COVID-19 — filing responsibilities.

Millions use tax software to file their state and federal taxes. Plenty more turn to tax professionals at filing season.

But it’s always fun to look at tax specifics. Hey, I do write a tax blog! So this weekend’s Saturday Shout Out goes to the Tax Foundation’s looks at state — state individual income tax rates and brackets.

2 years’ worth of state tax details: Yes, I said looks, plural.

The Washington, D.C.-based tax policy nonprofit updates the data every year. Since the filings being worked on now are for the 2020 tax year, the first Shout Out is to the organization’s 2020 state tax year data.

Katherine Loughead, a senior policy analyst with the Tax Foundation who compiled the info, offers these 2020 state tax highlights:

  • 43 states levy individual income taxes.
  • 41 tax wage and salary income.
  • Of those states taxing wages, 9 have single-rate tax structures, with one rate applying to all taxable income.
  • 32 states and the District of Columbia levy graduated-rate income taxes, with the number of brackets varying widely by state. Hawaii has 12 brackets, the most in the country.
  • 7 states levy no individual income tax at all.
  • For the 2020 tax year, 2 states — New Hampshire and Tennessee — exclusively tax dividend and interest income.

And since we’re well into a new tax year and that means a need for some planning in the coming months, Loughead’s recent look at 2021 state tax year data also gets a Shout Out.

Current-year state tax highlights include:

  • 42 states levy individual income taxes.
  • 41 tax wage and salary income.
  • Of those states taxing wages, 9 have single-rate tax structures, with one rate applying to all taxable income.
  • 32 states and the District of Columbia levy graduated-rate income taxes, with the number of brackets varying widely by state. Hawaii’s 12 income brackets are still the most in the country.
  • 8 states don’t collect any individual income tax at all. Joining the group this year is Tennessee. The Volunteer State eliminated its personal interest and dividend income levy, the so-called Hall Income Tax, effective Jan. 1, 2021. 
  • New Hampshire now is alone in exclusively taxing personal dividend and interest income.

You can check out both of the Tax Foundation’s/Loughead’s pieces for specifics on the various state individual income tax rates and the associated earnings brackets.

And if you want to go directly to a state’s revenue department for more, such as forms and usually free online filing options, I’m giving the ol’ blog’s state tax directory this weekend’s final Saturday Shout Out.

You also might find these items of interest:

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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