How state income tax actually works — five models, not one

If you look up your state's income tax rate, you get a single number. Illinois is 4.95%. Colorado is 4.40%. Pennsylvania is 3.07%. It reads like the arithmetic is settled: multiply your salary by the rate and you have your state tax.

That's wrong in all but one of the states we've modelled — and the error runs in one direction. It always overstates what you owe.

We found this the hard way. When we built the state layer of our paycheck calculator, we implemented exactly that model: rate times gross pay. Then we sat down to verify each state against its own revenue department before launch. Ten of the eleven flat-rate states we checked were wrong. Not because the rates were stale — because the model was.

What a "flat rate" doesn't tell you

A rate is only half a tax. The other half is what the rate applies to, and states answer that question in at least five different ways.

1. Some states start from your federal taxable income

Colorado and Arizona don't tax your salary. They tax the number the federal government arrives at after your federal standard deduction — $16,100 for a single filer in 2026. So a Colorado single filer earning $75,000 pays 4.40% on $58,900, not on $75,000. That one distinction is worth $708 a year.

2. Some states have their own standard deduction

Georgia, Iowa, North Carolina, Kentucky and Louisiana each subtract a state-specific amount before applying the rate. Kentucky's is $3,360. Louisiana's, after its 2025 reform, is $12,500 for a single filer and double that for joint filers. Same idea as the federal deduction, different number, set by a different legislature.

3. Some states use personal exemptions instead

Illinois allows $2,925 per person. Indiana allows $1,000. Michigan allows $5,900. Massachusetts allows $4,400 for a single filer, $8,800 married filing jointly. An exemption behaves like a deduction here but is calculated per person rather than per household, so it scales with dependants in a way a standard deduction doesn't.

4. One state gives a credit instead of a deduction

Utah taxes your federal adjusted gross income with no standard deduction and no personal exemption — and then hands back a taxpayer tax credit worth 6% of your federal deductions, which phases out at 1.3% of income above a threshold. The credit comes off the tax, not off the income, which means it can't be modelled as a deduction at all. Getting Utah right required a different mechanism entirely.

5. And one state really does tax from the first dollar

Pennsylvania. Its Department of Revenue states plainly that it provides no standard deduction and no personal exemption. Rate times gross is exactly right — for Pennsylvania, and, among the 41 states we've checked, only Pennsylvania.

What the difference is worth

Here is what correcting the model changed for a single filer earning $75,000, paid bi-weekly, taking the standard deduction. Every figure is annual state income tax, and every one moved down. These are generated from the same dataset that powers the state pages, so they cannot drift apart from them.

Recomputed from the site's own data on every build · State tax tables last verified August 26, 2026 · Each state links to its own page, which carries the primary source it was checked against

At the top of that table, the naive model tells someone in Georgia they lose $749 a year they don't actually lose. That's not a rounding difference. At the bottom, Pennsylvania — where rate times gross is simply correct, and the naive model owes nobody an apology.

You can run any salary through the paycheck calculator, or see the same salary compared across every state we cover on the take-home pay by state page.

Two states that don't behave at all

Mississippi isn't a flat tax. It's usually described as one — 4%, flat. In fact the first $10,000 of taxable income is taxed at 0%, and only income above that is taxed at 4%. For a married couple filing jointly, the exempt band applies per spouse. Structurally it's a two-bracket progressive tax that happens to have a zero at the bottom, and modelling it as flat overstates every Mississippi paycheck by $732 at this salary.

Colorado's 2026 rate isn't knowable yet. The statutory rate is 4.40%, but Senate Bill 24-228 made a temporary income tax rate reduction one of the mechanisms Colorado uses to refund surplus revenue under TABOR, for tax years 2024 through 2034. The size of the reduction is tiered on how much surplus remains after county property-tax reimbursements: nothing below $300 million, rising in steps to a maximum of 0.15 percentage points. Tax year 2024 came in at 4.25%. Which means Colorado's real 2026 rate depends on a surplus figure that won't be certified until the autumn. No calculator can tell you Colorado's 2026 rate today — including ours. What we can do is tell you that, and show you the bound.

Why we're publishing this

Two reasons.

The first is that we got it wrong, and the correction is more useful to you than the fix was to us. If you've used any take-home pay calculator and the number felt high, this is a plausible reason why.

The second is that it changed how we work. Our annual data refresh was going to check rates every January, the way you'd update any dataset. It now has to re-check models too — because a state can change what its rate applies to without changing the rate, and a refresh that only looks at percentages would sail straight past it.

Every state page on this site carries the source we verified it against and the date we checked. Where we can't confirm a figure from a primary source, the page says so rather than showing a number we can't stand behind — and where we can't confirm the structure either, we don't publish the page at all. That's why Louisiana currently shows a pending notice, and why 10 states aren't live yet.

We'd rather have 41 states we can defend than 51 we can't.

Related

• Paycheck calculator — your exact numbers, any salary, state and pay frequency
• Take-home pay by state — the same salary compared across all 41 states we cover
• Methodology — every source behind these figures and when each was last verified

Muhammad Umar built DollarFigures, a set of free US personal-finance calculators. Every figure is checked against the IRS, the SSA and state revenue departments, and every page shows when it was last verified.