Updated 27 March 2026
Highest Income Tax States
California has the highest top rate (13.3%), but Oregon charges more at $250K income (9.2% effective vs 8.2%). The top rate is misleading without context. Here is what you actually pay.
Top 10 Highest Income Tax States
| # | State | Top Rate | Applies Above | Effective at $100K | Effective at $250K | Notes |
|---|---|---|---|---|---|---|
| 1 | California | 13.3% | $1,000,000+ | 5.8% | 8.2% | Highest top rate in the US. Mental health tax (1%) adds to top bracket. |
| 2 | Hawaii | 11.0% | $200,000+ | 7.2% | 9.1% | Hits high rates at lower income than most states. Aggressive brackets. |
| 3 | New Jersey | 10.75% | $1,000,000+ | 5.5% | 7.4% | Only applies to income over $1M. Effective rate much lower for most. |
| 4 | Oregon | 9.9% | $125,000+ | 8.4% | 9.2% | No sales tax, but income tax is among the highest. Hits 9.9% at a relatively low income. |
| 5 | Minnesota | 9.85% | $193,240+ | 6.8% | 8.4% | High rates but also high quality of life metrics. |
| 6 | New York | 10.9% | $25,000,000+ | 6.1% | 7.2% | Top rate only applies above $25M. NYC adds 3.876% city tax on top. |
| 7 | Vermont | 8.75% | $229,500+ | 5.9% | 7.8% | Small state, progressive brackets. |
| 8 | Iowa | 8.53% | $78,435+ | 7.2% | 8.1% | Hits high rate at low income. Iowa is reducing rates gradually through 2026. |
| 9 | Wisconsin | 7.65% | $280,950+ | 5.4% | 6.8% | Moderate brackets, nothing extreme. |
| 10 | Connecticut | 6.99% | $500,000+ | 5.0% | 6.2% | Lower top rate than most on this list but applies broadly. |
Effective rates are for single filers with standard deduction. Married filing jointly will have lower effective rates. Rates are for 2025/2026 tax year.
What These Numbers Actually Mean
Top rate is not what you pay
California's 13.3% only applies to income above $1 million. A Californian earning $100K pays an effective rate of about 5.8%. The top rate is a marginal rate on the last dollar earned, not on all income.
NYC is a special case
New York State income tax tops at 10.9% for income above $25M. But New York City adds its own tax of up to 3.876%. A high earner in NYC pays up to 14.776% combined state+city income tax, the highest effective rate in the country.
No income tax does not mean no tax
The 9 states with no income tax (TX, FL, NV, WA, WY, SD, AK, TN, NH) often have higher property taxes, sales taxes, or both. Texas property tax (1.68%) on a $500K home is $8,400/year. That is equivalent to 8.4% income tax on $100K.
Effective rate matters more than top rate
Oregon's 9.9% rate hits at $125K. California's 13.3% hits at $1M. At $250K income, Oregon's effective rate (9.2%) is actually higher than California's (8.2%). The bracket thresholds matter as much as the rates.