Among states that tax wages, North Dakota and Arizona have the lowest top income tax rates in 2026, both at 2.5%. Ohio (2.75%), Indiana (2.95%), Louisiana (3%) and Pennsylvania (3.07%) follow close behind. For many single filers, North Dakota takes nothing at all, because it doesn't tax the first $48,475 of taxable income.
If you want zero, nine states skip the wage tax entirely. This guide covers the states that do tax wages but keep the bite small, and explains why the lowest state income tax rate on paper isn't always the lowest total once local taxes are added.
The 10 lowest state income tax rates for 2026
These are the lowest top rates among states that tax wages, using our 2026 state data based on the Tax Foundation's tables. Figures are for single filers.
| State | Top rate | Structure |
|---|---|---|
| North Dakota | 2.5% | 0% up to $48,475 of taxable income, 1.95% up to $244,825, 2.5% above |
| Arizona | 2.5% | Flat, after an $8,350 standard deduction |
| Ohio | 2.75% | 0% up to $26,050, 2.75% above (estimate) |
| Indiana | 2.95% | Flat, plus a county income tax in every county |
| Louisiana | 3% | Flat, after a $12,875 standard deduction |
| Pennsylvania | 3.07% | Flat, with no deduction or exemption |
| Kentucky | 3.5% | Flat, after a $3,360 standard deduction |
| Iowa | 3.8% | Flat, starting from federal taxable income |
| North Carolina | 3.99% | Flat, after a $12,750 standard deduction |
| Mississippi | 4% | 0% on the first $10,000 of taxable income, 4% above |
Other states with low top rates just outside this list include Arkansas (3.9% top rate) and Colorado (4.4% flat).
Why North Dakota is in a class of its own
North Dakota starts from federal taxable income, so the $16,100 federal standard deduction for single filers applies first. Then the first $48,475 of taxable income is taxed at 0%. Put together, a single filer can earn about $64,575 in wages before owing any North Dakota income tax, assuming no other income or adjustments.
Above that, the rate is just 1.95% until taxable income reaches $244,825, and 2.5% after. That makes North Dakota the lowest income tax of any state that taxes wages. Married couples filing jointly get a larger zero bracket, $80,975 of taxable income.
Worked example: a $62,000 salary paid weekly
Here is a single filer earning $62,000, paid weekly (52 paychecks), with no pre-tax deductions. Federal withholding ($101.15), Social Security ($73.92) and Medicare ($17.29) per paycheck are the same in every state.
| State | State tax per paycheck | State tax per year | Net per paycheck |
|---|---|---|---|
| North Dakota | $0.00 | $0 | $999.95 |
| Ohio (estimate) | $17.88 | $930 | $982.07 |
| Arizona | $25.79 | $1,341 | $974.16 |
| Louisiana | $28.34 | $1,474 | $971.61 |
| Indiana (before county tax) | $34.61 | $1,800 | $965.34 |
| Pennsylvania | $36.60 | $1,903 | $962.52 |
These are estimates from our paycheck calculator. Pennsylvania's net also includes the 0.07% employee unemployment contribution ($0.83 per paycheck). At this salary, the North Dakota worker's paycheck looks the same as it would in a state with no income tax at all.
Notice that Arizona and North Dakota share a 2.5% top rate but land far apart in dollars. Arizona taxes almost everything above its $8,350 deduction at 2.5%, while North Dakota's zero bracket shelters this entire salary.
Local taxes can flip the ranking
Three of the lowest-rate states are also places where local income taxes are common, and that can change the picture completely.
- Ohio: most cities and villages levy a municipal income tax, commonly 1% to 2.5%, and some school districts add more. On many Ohio pay stubs the city tax is bigger than the state tax.
- Indiana: all 92 counties levy a county income tax, typically about 1% to 3%, on top of the 2.95% state rate.
- Pennsylvania: most municipalities and school districts levy a local earned income tax, often around 1%, and Philadelphia's wage tax is higher.
Kentucky, at 3.5%, also has common local occupational taxes, especially in Louisville and Lexington. A 2% Ohio city tax on the $62,000 salary above would add about $23.85 per paycheck ($1,240 a year), more than the state's estimated $17.88. Enter your local rate in the calculator's local tax box to see the full amount. Our guides to the Ohio municipal income tax and the Pennsylvania local earned income tax go into more detail.
Lowest rate vs. lowest tax: what to compare
The rate is only one input. When comparing states, look at:
- Deductions and exemptions. Louisiana's $12,875 standard deduction shelters more income than Pennsylvania's zero, which is why Louisiana's 3% takes less than Pennsylvania's 3.07% in the example.
- Local income taxes. Add them to the state rate for your real total.
- Treatment of pre-tax deductions. Pennsylvania taxes 401(k) contributions, while most states don't.
- Other taxes. Sales and property taxes can outweigh a small income tax difference.
For the no-tax end of the spectrum, see our list of states with no income tax. For the single-rate states specifically, see states with a flat income tax.
Try it with your own numbers
The ranking above uses one salary and one filing status. Your result depends on your pay, filing status, deductions and where you live within the state. Open the North Dakota paycheck calculator, the Arizona paycheck calculator or the Louisiana paycheck calculator, or pick any state from the state directory.
Frequently Asked Questions
Which state has the lowest income tax in 2026?
Of the states that tax wages, North Dakota. Its top rate is 2.5%, and the first $48,475 of taxable income for single filers is taxed at 0%.
Is Arizona's 2.5% rate the same as North Dakota's?
The top rates match, but Arizona applies 2.5% to nearly all taxable income, while North Dakota taxes the first $48,475 at 0% and most of the rest at 1.95%. North Dakota usually takes less.
Does Indiana really have a 2.95% income tax?
That is the state rate, but every Indiana county adds its own income tax, typically about 1% to 3%. Your total depends on your county.
Is Ohio's figure exact?
No. Ohio's personal exemption varies with income, so our Ohio figures are estimates. Check the Ohio Department of Taxation for the exact calculation.
Sources
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026
- IRS: Tax inflation adjustments for tax year 2026
- IRS Publication 15, Employer's Tax Guide
Run the numbers for your state
Written and checked against IRS, Social Security Administration and state tax agency publications for the 2026 tax year. General information, not tax, legal or financial advice. Read our editorial policy, calculation methodology and sources.