State Taxes and Your Take‑Home Pay: What to Expect
State income taxes vary widely. Some states have no income tax; others have progressive systems. We use an estimated effective rate to reflect your overall burden across brackets, which tends to be lower than your top marginal rate.
- No‑tax states: TX, FL, WA, NV, WY, SD, AK, TN, NH (NH taxes interest/dividends).
- Flat‑tax states: some charge a single percentage on all income.
- Progressive states: rates increase as income rises.
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Effective Rate vs Marginal Rate
Your marginal rate is the tax percentage on the last dollar you earn. Your effective rate is total tax divided by total income. Because progressive brackets tax the first dollars at lower rates, your effective rate is usually lower than your top marginal bracket. Our tool uses an effective state rate you can override.
Case Studies
Consider two workers each earning $60,000. In a no‑tax state, net may be thousands higher than in a high‑tax state. But if housing is much cheaper in the high‑tax state, the overall lifestyle difference may narrow. That’s why we recommend evaluating both net pay and cost of living.
Special Situations
- Local wage taxes (some cities) can affect take‑home.
- Credits, deductions, and filing status changes move the needle.
- Remote workers may owe taxes in the state where they physically work.