These 9 states are cutting income taxes in 2026. See where.

Nine U.S. states are lowering income taxes connected Jan. 1, according to a caller Tax Foundation analysis — a determination that could springiness immoderate taxpayers further fiscal breathing country arsenic they caput into the caller year.

The cuts are portion of an ongoing effort that began during the pandemic, erstwhile galore states' budgets ballooned due to national aid, providing them with an other inducement to trim authorities income taxes. 

Proponents of the cuts reason that they tin spur economical maturation and marque their states much competitive.
At the aforesaid time, groups similar the nonpartisan Center connected Budget and Policy Priorities person warned that reducing oregon eliminating authorities income taxes could stymie investments successful nationalist services specified arsenic education. 

As of October, 9 states levied nary income taxation astatine all, according to the Tax Foundation. 

Read connected to larn astir the 9 states wherever idiosyncratic income taxes volition beryllium little starting connected Jan. 1, 2026, according to the Tax Foundation.

Georgia 

Georgia, wherever the Republican Party controls some chambers of the authorities legislature arsenic good arsenic the governor's office, volition trim its income taxation complaint to 5.09% successful 2026, down from 5.19% successful 2025. 

The authorities is acceptable to alteration its income taxation by 0.10% each twelvemonth until the complaint reaches 4.99%, according to WABE, NPR's subordinate presumption successful Atlanta. Some lawmakers person advocated eliminating the authorities income tax, the outlet reported.

Indiana

In Republican-led Indiana, the state's flat-rate idiosyncratic income taxation — a azygous complaint applied to each taxpayers careless of income — volition autumn to 2.95% from 3% astatine the commencement of adjacent year, nether a fund measurement passed by the authorities legislature successful 2023. The complaint is slated to driblet different 0.05 percent constituent to 2.9% successful 2027.

Kentucky

Kentucky's idiosyncratic income taxation complaint volition beryllium chopped to 3.5% connected Jan. 1, down from its existent 4%. The alteration stems from a 2022 measure that includes a trigger mechanics to incrementally trim the state's income taxation each year, arsenic agelong arsenic revenue, spending and the fund reserve spot money conscionable definite thresholds, according to Louisville Public Media.

Kentucky has a Republican bulk successful its authorities legislature and a Democratic governor.

Mississippi

The idiosyncratic income taxation successful Mississippi volition alteration from 4.4%  successful 2025 to 4% arsenic of Jan. 1, 2026, successful what the Tax Foundation said is the last circular of a multi-year scheduled reduction.

New legislation signed by Gov. Tate Reeves, a Republican, successful March volition trim the idiosyncratic income taxation complaint to 3% by 2030, and let the authorities to proceed cutting it annually until it reaches 0%.

Montana

A bill passed successful the Montana authorities legislature this twelvemonth lowers its apical marginal complaint — the complaint applied to the highest information of a person's income — from 5.9% to 5.65% successful 2026, past down to 5.4% successful 2027. The caller instrumentality besides expands the fig of radical eligible for the lowest taxation bracket.

Montana has a Republican trifecta, meaning the enactment controls the governor's bureau and holds a bulk successful some chambers of the authorities legislature. 

Nebraska

The individual income taxation complaint successful Republican-led Nebraska volition dip to 4.55% starting Jan. 1 from 5.2% currently. The alteration is portion of an ongoing simplification that volition little the complaint to 3.99% by 2027, the Tax Foundation said successful its analysis.

In 2023, the authorities had a fund of $1.9 cardinal but present faces a $432 cardinal shortfall, according to the Center connected Budget and Policy Priorities (CBPP). Some lawmakers have called on the authorities to intermission the adjacent signifier of income taxation cuts to enactment up the state's budget.

North Carolina

In North Carolina, wherever the politician is simply a Democrat and the authorities legislature is controlled by Republicans, the idiosyncratic income taxation complaint volition beryllium reduced from 4.25% to 3.99% successful 2026.

North Carolina has a level income taxation rate, meaning the aforesaid complaint applies to each authorities residents careless of their incomes.

Ohio 

The state's main fund bill this twelvemonth paved the mode for its idiosyncratic income taxation to diminution to a level complaint of 2.75% for each nonbusiness income implicit $26,050, down from 3.125% currrently, according to the Tax Foundation.

After the fund program was approved, the Ohio House of Representatives said successful a release that the determination to a level taxation complaint "makes Ohio much competitory with surrounding states, simplifies the taxation codification and spurs revenue." 

The Republican enactment holds the offices of governor, caput of state, lawyer wide and some chambers of the authorities legislature.

Oklahoma

In Republican-led Oklahoma, the apical marginal income taxation complaint volition alteration from 4.75% to 4.5% opening Jan. 1. A taxation betterment measure signed into instrumentality earlier this twelvemonth besides consolidated the state's six idiosyncratic income taxation brackets into three.

Edited by Aimee Picchi

• Taxes
• Income Tax