Personal Income Tax

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50. Personal Income Tax

If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming, you may not be aware that most of the rest of the country has to file two tax returns every April. Every other state, aside from these lucky seven, requires income taxover and above federal taxesfrom its citizens.

Deductions and exemptions available to the taxpayer can be very detailed and vary greatly from state to state. Because of their number, no attempt has been made here to list them. As an example, Missouri claims one of the more unusual deductions: fair market value of literary, musical, scholarly, or artistic composition contributed by creator to nonprofit tax-exempt entity (with written appraisal attached), less federal deduction taken (Source, State and Local Taxes, vol. 2. RIA). The nature of various deductions can change fairly quickly to respond to various social, historical, and political events. For example, for several years starting in the early 1990s, there was a provision to exempt all income of estates of individuals who perished in Operations Desert Storm and Desert Shield.

Even though the trend for the last several years has been to lower taxes, an occasional state has dared to raise their rates. For example, until recently North Dakota had led the states with a rate of 12 percent on income over $50,000, but their rate now tops out at 5.54 percent of income over $319,000! Most rates in the higher brackets are in the 5 percent to 8 percent range. However, Rhode Island and Vermont tax at rates of up to 25% and 24%, respectively, but the percentages are applied to the total federal tax liability and are not applied directly to the taxpayers income.

Ohio ($200,000), Wisconsin ($183,210), New Jersey ($500,000), and North Dakota ($336,550) have the highest income brackets. The intent here is clearly to have the rich pay taxes at higher rates and shoulder more of the load for maintaining the revenue base; a pragmatic view, however, is that higher brackets protect those in the middle from the higher rates at the top. Most states have an upper bracket that is below $60,000.

Six states (and the District of Columbia) have had their income tax schemes challenged in court: Delaware, Illinois, Michigan, Nebraska, Ohio, and Oklahoma. All of these tax codes have been certified constitutional by federal courts.

The chart in this chapter deals only with the general principles of state personal income tax. The tax tables are accurate but are very much consolidated and generalized in order to give the reader a broad basis for comparison. The rates listed are, for the most part, for married couples filing jointly or for heads of households. Where this is not the case, the rate is noted. Slightly different rates and tables will apply in most states for couples filing separately or for single individuals. Also, there are countless deductions and exemptions available to the taxpayer that are similar to those available in the federal income tax code. Included here are only the general deductions and exemptions for determining state taxable income. See your state codes or the code of the state in which you are interested for detailed information.

Table 50: Personal Income Tax
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
ALABAMA40-18-1, et seq.Resident natural persons, fiduciaries, estates and trusts, and nonresidents receiving income from property owned or business transacted in the stateFirst $500, 2%;
Next $2,500, 4%;
Over $3,000, 5% (for a single person)
YesYes
ALASKAIncome tax repealed 1/1/79, Alaska Laws 1980, 2d Sp. Sess. §9, ch. 2Individual may file at his or her option to obtain certain tax credits for political donations or expenses for household and child care necessary for employment. Credit allowed only if legislature appropriates money. (§43.20.013)N/AN/AN/A
ARIZONA43-1011, et seq.All Arizona residents and nonresidents that derive income from activity or ownership of property within the state;
Partnerships are not taxable
First $20,000, 2.59%;
Next $29,999, 2.88%;
Next $49,999, 3.36%;
Next $199,999, 4.24%;
Over $300,000, 4.54%
NoYes
ARKANSAS26-51-201, et seq.Resident individuals, estates and trusts, and nonresidents deriving income from local property or activity;
Partnerships are not taxable
First $3,599, 1%;
Next $3,000, 2.5%;
Next $3,000, 3.5%;
Next $6,000, 4.5%;
Next $10,000, 6%;
$30,100 or over, 7%;
general rate for all taxpayers; special reduced rates available for low income
NoNo
CALIFORNIARev. & Tax Code §§17041, et seq.Resident persons, including estates and trusts; nonresidents and part-year residents are liable for prorata shareFirst $13,243 1%;
Next $18,152, 2%;
Next $18,156, 4%;
Next $19,236, 6%;
Next $18,146, 8%;
Over $86,934, 9.3%
NoYes
COLORADO39-22-104, et seq.Every individual, estate, and trust that is required to file federal return; non- and part-year residents are liable for pro-rata share;
Partnerships are not subject to tax
4.63% of federal taxable income; general rate for all taxpayers; alternative rates may applyNoYes
CONNECTICUT51, et seq., act 3, Laws (1991), 1st sp. sess. Act 160, Law 1995 §12-700, et seq.Each resident individual, trust, and estate with Connecticut taxable income;
Nonresident individuals, estates, and trusts on Connecticut income
First $16,000, 3%;
5% above $16,000
NoYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
DELAWARETit. 30 §1102, et seq.Individuals, estates, and trusts with Delaware taxable income;
Residents and nonresidents of Wilmington are subject to an additional tax of 1.25% on all wages, salaries, commissions, and net profit
First $2,000, no tax;
Next $3,000, 2.2%;
Next $5,000, 3.9%;
Next $10,000, 4.8% Next $5,000, 5.2% Next $35,000, 5.55%;
Over $60,000, 5.95%
NoYes
DISTRICT OF COLUMBIA47-1806.01, et seq.Any individual domiciled in the district, any resident of 183 days or more, and estates and trustsFirst $10,000, 4%;
Next $30,000, 7.5%;
Over $40,000, 9%
NoYes
FLORIDANo personal income tax    
GEORGIA48-7-1, et seq. Act 912 Law 1994Resident and non-resident individuals with taxable net income and estates and trusts;
Partnerships are not taxable;
Counties and municipalities may levy a 1% tax on an entire taxable net income
First $750, 1% Next $1,500, 2%;
Next $1,500, 3%;
Next $1,500, 4%;
Next $1,750, 5%;
Over $7,000, 6% (for single person)
NoYes
HAWAII235-1, et seq.Resident individual, estate or trust, and nonresident individual estates or trusts on income derived from Hawaii sourcesFirst $4,800, 1.4%;
Next $4,800, 3.2%;
Next $9,600, 5.5%;
Next $9,600, 6.4%;
Next $9,600, 6.8%;
Next $10,000, 7.2%;
Next $24,000, 7.6%;
Next $24,000, 7.9%;
Over $96,000, 8.25%
NoYes
IDAHO63-3001, et seq.Resident individuals, estates and trusts with taxable income and nonresident or part-year resident individuals, estates and trusts from Idaho sources;
Partnerships are not taxable
First $2,396, 1.6%;
Next $2,396, 3.6%;
Next $2,396, 4.1%;
Next $2,396, 5.1%;
Next $2,396, 6.1%;
Next $5,990, 7.1%;
Next $29,954, 7.4%;
Over $47,926, 7.8%;
plus $10 excise tax
NoYes
ILLINOIS35 ILCS 5/201, et seq.Individuals, estates, and trusts;
Partnerships are not taxable
3% of taxable net income imposed on all taxpayers;
An additional personal property replacement tax of 1.5% of net income is imposed on partnerships, trusts, and S corporations.
NoYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
INDIANA6-3-2-1, et seq.Resident individuals, estates and trusts, and nonresidents on adjusted gross income derived from Indiana sources;
Partnerships are not taxable
3.4% of adjusted gross income; general rate for all resident taxpayers;
additional local taxes may be required
NoYes
IOWA422.5, et seq.Residents, part-year residents, nonresidents, estates and trustsFirst $1,300, 0.36%;
Next $1,300, 0.72%;
Next $2,600, 2.43%;
Next $6,500, 4.50%;
Next $7,800, 6.12%;
Next $6,500, 6.48%;
Next $13,000, 6.80%;
Next $19,500, 7.92%;
Over $58,500, 8.98%
YesYes
KANSAS79-32, 110, et seq.Resident and nonresidents, estates, trusts and fiduciaries;
Partnerships and S corporations are not taxable
First $30,000, 3.5%;
Next $30,000, 6.25%;
Over $60,000, 6.45%
NoYes
KENTUCKY141.020, et seq.Residents, nonresidents on net income from businesses, trade, professions or other activities carried on in the state or tangible or intangible property located in the stateFirst $3,000, 2%;
Next $1,000, 3%;
Next $1,000, 4%;
Next $3,000, 5%;
Next $67,000, 5.8% Over $75,000, 6%
NoYes
LOUISIANA47:200, et seq.Residents and nonresidents on Louisiana income;
Individuals permanently domiciled in the state are taxed on all income from whatever source; All others are taxed on Louisiana income; Partnerships are not taxable
First $12,500, 2%;
Next $12,500, 4%;
Over $25,000, 6%
NoYes
MAINETitle 36 §§5111, et seq.Every resident: entire taxable income and nonresidents: adjusted gross income, estates, and trusts: entire taxable income;
Partnerships and LLCs are not taxable
First $9,500, 2%;
Next $9,450, 4.5%;
Next $19,500, 7%;
Over $37,950, 8.5%
NoYes
MARYLANDTax-Gen. Art. 10-102, et seq.Residents and nonresidents on taxable net income. Partnerships are not taxed.First $1,000, 2%;
Second $1,000, 3%;
Third $1,000, 4%;
Over $3,000, 4.75%
NoYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
MASSACHUSETTSCh. 62, generallyIndividuals, including fiduciaries, estates of deceased Massachusetts inhabitants, and nonresidents earning income in Massachusetts;
Partnerships and S corporations are not taxed;
A corporate trust engaged in business in Massachusetts is taxed
Interest, dividends, 5.3%;
short term capital gains, 12%;
all other income, 5.85%
NoYes
MICHIGAN206.51Individuals, estates, and trusts; Each person with business activity in Michigan allocated or apportioned to Michigan is subject to the single business tax; Partnerships and S corporations are not taxable3.9% of taxable incomeNoYes
MINNESOTA290.01, et seq.Resident and nonresident individuals, estates and trustsFirst $31,150, 5.35%;
Next $92,600, 7.05%;
Over $123,750, 7.85%
NoYes
MISSISSIPPI27-7-5, et seq.Resident individuals, trusts and estates on entire net income from property owned or sold and business trade or occupation carried on in Mississippi by nonresident individuals, partnerships, trusts and estates; Partnerships and S corporations are not taxableFirst $5,000, 3%;
Next $5,000, 4%;
Over $10,000, 5%
NoNo
MISSOURI143.011, et seq.Resident individuals, nonresidents with income derived from Missouri sources, and estates and trusts; Partnerships are not taxable; local taxes may be requiredFirst $1,000, 1.5%;
Next $1,000, 2%;
Next $1,000, 2.5%;
Next $1,000, 3%;
Next $1,000, 3.5%;
Next $1,000, 4%;
Next $1,000, 4.5%;
Next $1,000, 5%;
Next $1,000, 5.5%;
Over $9,000, 6%
YesYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
MONTANA15-30-101, et seq.Residents on entire net income; Nonresidents on net income from property owned and business carried on in Montana; Estates and trusts are taxed during administration except if for educational, charitable, or religious purposes; Partnerships and S corporations are not taxedFirst $2,300, 1%;
Next $1,800, 2%;
Next $2,100, 3%;
Next $2,400, 4%;
Next $2,400, 5%;
Next $3,100, 6%;
Over $13,900, 6.9%
YesYes
NEBRASKA77-2701, et seq.Residents on entire income and nonresidents on income derived from Nebraska sources; Estates and trusts are taxable; Partnerships and S corporations are not taxableFirst $4,000, 2.56%;
Next $27,000, 3.57%;
Next $19,000, 5.12%;
Over $50,000, 6.84%
NoYes
NEVADANo personal income tax    
NEW HAMPSHIRE77:1-1, et seq.Inhabitants and part-year residents, partnerships, associations and trusts, and fiduciaries with income of more than $2,400 per year5%, limited to interest and dividendsNoNo
NEW JERSEY54A:1, et seq.Individuals, estates and trusts, residents and nonresident taxed on gross income; Nonresidents are only taxed on income derived from New Jersey sources; Partnerships and associations are not taxable; Local taxes may be requiredFirst $20,000, 1.4%;
Next $30,000, 1.75%;
Next $20,000, 2.45%;
Next $10,000, 3.5%;
Next $70,000, 5.525%;
Next $350,000, 6.37% Over $500,000, 8.97%
NoNo
NEW MEXICO7-2-7, et seq.Residents on net income and nonresidents deriving income from business, employment, or property in New Mexico, including estates and trustsFirst $8,000, 1.7%;
Next $8,000, 3.2%;
Next $8,000, 4.7%;
Next $16,000, 6.0%;
Over $24,000, 6.8%
NoYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
NEW YORKTax 601, et seq. Ch. 60 §601Individuals, estates and trusts, and nonresidents on income derived from New York sources; Partnerships are not taxable; New York City taxes resident individuals, estates, and trusts on their city taxable income; Partnerships are not taxable (§§11-1701, et seq. ); A city income tax surcharge of 5% of net state tax is imposed on resident individuals, estates, and trusts of YonkersFirst $11,000, 4%;
Next $4,000, 4.5%;
Next $2,000, 5.25%;
Next $13,000, 5.9%;
Over $30,000, 6.85%
NoYes
NORTH CAROLINA105-134, et seq.Every individual on North Carolina taxable income, and income of estates and trusts; Partnerships are not taxableFirst $10,625, 6%;
Next $39,375, 7%;
Next $50,000, 7.75%;
Over $100,000, 8.25% (Beginning 2008)
NoYes
NORTH DAKOTA57-38-02, et seq.Residents and nonresidents on property owned, employment, or business carried on in North Dakota;
Individuals, estates, and trusts have optional tax available (§57-38-30.3);
Partnerships are not taxed
First $41,050, 2.1%;
Next $64,950, 3.92%;
Next $65,650, 4.34%;
Next $164,900, 5.04%;
Over $336,550, 5.54%
YesYes
OHIO5747.01, et seq.Every individual and estate residing in or earning or receiving income in Ohio;
Partnerships are not taxable;
Local taxes may be required
First $5,000, 0.649%;
Next $5,000, 1.299%;
Next $5,000, 2.598%;
Next $5,000, 3.247%;
Next $20,000, 3.895%;
Next $40,000, 4.546%;
Next $20,000, 5.194%;
Next $100,000, 6.031%;
Over $200,000, 6.55%
NoYes
OKLAHOMATitle 68 §2355, et seq.Resident and nonresident individuals, estates, and trusts on taxable Oklahoma income; Partnerships are not taxableFirst $2,000, 0.5%;
Next $3,000, 1%;
Next $2,500, 2%;
Next $2,300, 3%;
Next $2,400, 4%;
Next $2,800, 5%;
Remainder, 5.65%
YesYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
OREGON316.037, et seq.Every Oregon resident on entire taxable income and every nonresident or part-year resident on a prorated amount of their entire taxable income; Estates and trusts are taxable; Partnerships are not taxable; Local taxes may be requiredFirst $2,000, 5%;
Next $3,000, 7%;
Over $5,000, 9% (single taxpayer)
YesYes
PENNSYLVANIATit. 72 §§7301, et seq.Resident and nonresident individuals, estates, or trusts; Nonresidents only pay for portion of income derived from Pennsylvania sources; Partnerships and associations are not taxable; Local taxes may be required3.07%NoNo
RHODE ISLAND44-30-1, et seq.Resident and nonresident individuals, estates, and trusts on Rhode Island income; Partnerships are not taxed25% of federal taxNoYes
SOUTH CAROLINA12-6-510, et seq.Individuals, estates, and trusts; Partnerships are not subject to tax; Part-year and nonresidents are subject to special taxFirst $2,570, 2.5%;
Next $2,570, 3%;
Next $2,570, 4%;
Next $2,570, 5%;
Next $2,570, 6%;
Over $12,850, 7%
NoYes
SOUTH DAKOTANo personal income tax    
TENNESSEE67-2-101, et seq.Resident persons, partnerships, associations, trusts, estates, and corporations6%, limited to interest and dividends, not including ordinary commercial paper, trade acceptances and CDs, and certificates of depositNoNo
TEXASNo personal income tax    
UTAH59-10-104, et seq.Resident individuals, estates and trusts, and nonresidents on state taxable income derived from Utah sources;
Partnerships are not taxable
First $2,000, 2.3%;
Next $2,000, 3.3%;
Next $2,000, 4.2%;
Next $2,000, 5.2%;
Next $3,000, 6%;
Over $11,000, 7%
NoYes
VERMONTTit. 32 §§5822, et seq.Residents, nonresidents, estates, and trusts on Vermont income24% of federal income taxNoYes
StateCode SectionWho is Required to FileRateFederal Income Tax DeductibleFederal Income Used as Basis
VIRGINIA58.1-320, et seq.Individuals, estates, and trusts; Partnerships are not taxable; Estates and trusts are subject to tax on their Virginia taxable income; Local taxes may be requiredFirst $3,000, 2%;
Next $2,000, 3%;
Next $12,000, 5%;
Over $17,000, 5.75%
NoYes
WASHINGTONNo personal income tax    
WEST VIRGINIA11-21-4eEvery individual, estate, and trust; Special tax on nonresidents with West Virginia income; Partnerships are not taxableFirst $10,000, 3%;
Next $15,000, 4%;
Next $15,000, 4.5%;
Next $20,000, 6%;
Over $60,000, 6.5%
NoYes
WISCONSIN71.02, et seq.Individuals, fiduciaries (except fiduciaries of nuclear decomposing trust or reserve fund), and trusts on net income; nonresident individuals and trusts on income derived from Wisconsin sources; nonresidents and part-year residents tax liability is prorated according to amount of income derived from Wisconsin sources; Special recycling surcharges apply to all Wisconsin individuals, estates, trusts, businesses, and partnerships except those engaged solely in farmingFirst $12,210, 4.6%;
Next $12,220, 6.15%;
Next $158,780, 6.5%;
Over $183,210, 6.75%
NoYes
WYOMINGNo personal income tax    

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