What Is State Income Tax?
State income tax is a tax that most US states levy on the income of residents and of non-residents who earn income in the state. It is separate from federal income tax. Some states use progressive brackets, some use a single flat rate, and a few states have no broad-based income tax on wages.
Different Structures
States set their own rates, deductions, and credits, and some cities and counties add a local income tax.
Withholding
Employers in states with an income tax generally withhold it from each paycheck along with federal tax.
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🔗 Related Terms
More Taxes Terms
- Additional Medicare Tax
- Adjusted Gross Income (AGI)
- Alternative Minimum Tax (AMT)
- Capital Gains Tax
- Capital Loss
- Child Tax Credit
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.