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14 states will cut individual income taxes in 2024: see if yours is one of them
In the US, individual income taxes will be cut while tax rates rise. Here are the details.
Tax season is about to begin. It’s no NFL season excitement, but from January 29 through April 15, the Internal Revenue Service (IRS) will receive tax returns for the 2023 tax year.
In addition, taxpayers must pay taxes in the state in which they reside, except for Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, which do not collect state income taxes.
Although tax year 2023 returns are filed this year, fortunately for some individuals, 14 states will have lower individual tax rates for tax year 2024. Here are all the details.
According to analysis by the Tax Foundation, a think tank that focuses on taxes, taxpayers in 14 states could get some financial relief from lower individual tax rates enacted in 2024.
The 14 states with reductions in top individual income tax rates taking effect this 2024 are: Arkansas, Connecticut, Georgia, Indiana, Indiana, Iowa, Kentucky, Kentucky, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, Ohio and South Carolina.
Personal income tax rate change from tax year 2023 to 2024:
- Arkansas: from 4.90% to 4.40%
- Connecticut: from 3 a 2% for the first $10,000 and $20,000 / from 5 to 4.5% for the first $40,000 and $80,000
- Georgia: 5.75% to 5.49%
- Indiana: 3.15% to 3.05%
- Iowa: 6% to 5.70%
- Kentucky: 4.50% to 4.00%
- Mississippi: 5% to 4.70%
- Missouri: 4.95% to 4.80%
- Montana: 6.75% to 5.90%
- Nebraska: 6.64% a 5.84%
- New Hampshire: from 4.00% to 3.00% (only interest and dividends, as the state does not collect tax rent)
- North Carolina: 4.75% to 4.50%
- Ohio: 3.99% to 3.50%
- South Carolina: 6.50% to 6.40%
On the other hand, California and Michigan have increased individual income tax rates for the 2024 tax year. In the case of the Golden State, the top rate will rise from 13.30% to 14.40%, which applies to income over $1 million.
Last year’s growing tax revenues triggered an automatic cut in the state’s income tax rate, which fell from 4.25% to 4.05% for tax year 2023. However, by 2024, Michigan will raise them again to 4.25%. This change is expected to bring in about $700 million more to Michigan’s general revenue fund.
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