Who has the worst income tax?

States With the Highest Income Taxes in 2025

When it comes to keeping more of your paycheck, where you live in the U.S. can make a big difference. For the 2025 tax year, some states are taking a significantly larger slice of residents’ income than others—topping out with California at a staggering 13.3%, the highest state income tax rate in the country.

California’s top marginal rate applies to the highest income earners, but it still casts a long shadow for professionals, entrepreneurs, and remote workers weighing where to plant their roots. Close behind are Hawaii at 11% and New York at 10.9%, both of which also impose relatively high costs on higher-income households. These rates don’t include local taxes, either—New York City, for example, adds its own tax on top, making the combined burden even heavier.

While no federal income tax exists at the national level beyond federal withholding, state-level taxes can vary dramatically. These high-tax states often justify the burden with robust public services—better schools, infrastructure, and social programs—but for many residents, especially freelancers, retirees, or those with sizable investments, the math doesn’t always add up.

Meanwhile, residents in states like Florida, Texas, and Nevada—places with no state income tax—often benefit from more take-home pay, even if other costs of living are higher. This growing imbalance has fueled migration trends over the past decade, with many professionals relocating to lower-tax states to keep more of their earnings.

As tax policies continue to shift, one thing remains clear: your state of residence can have a major impact on your financial life. Whether you're planning a move or just curious where your taxes go, understanding these differences is key to making smarter decisions in the years ahead.