State Income Tax Rates for Side Hustlers (2026)
Compare how state income taxes affect your side hustle take-home pay across all 50 states. Nine states charge no income tax at all — see which states save you the most. Looking for the tax on what you sell rather than what you earn? That's sales tax for freelancers.
Compare State Taxes on Self-Employment Income
Shows taxes for a single filer with only SE income (no W-2)
Best Case (No State Tax)
$39,539
take-home
Average State
$1,398
in state tax
Highest State Tax
$3,006
(Oregon)
| State ▼ | State Rate | State Tax | Total Tax | Effective Rate | Take-Home |
|---|---|---|---|---|---|
| Alabama (AL) | 4.00% | $1,215 | $11,676 | 23.4% | $38,324 |
| Alaska (AK) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| Arizona (AZ) | 2.50% | $759 | $11,220 | 22.4% | $38,780 |
| Arkansas (AR) | 4.40% | $1,336 | $11,797 | 23.6% | $38,203 |
| California (CA) | 9.30% | $2,824 | $13,285 | 26.6% | $36,715 |
| Colorado (CO) | 4.40% | $1,336 | $11,797 | 23.6% | $38,203 |
| Connecticut (CT) | 6.99% | $2,123 | $12,584 | 25.2% | $37,416 |
| Delaware (DE) | 6.60% | $2,004 | $12,465 | 24.9% | $37,535 |
| District of Columbia (DC) | 8.50% | $2,581 | $13,042 | 26.1% | $36,958 |
| Florida (FL) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| Georgia (GA) | 5.49% | $1,667 | $12,128 | 24.3% | $37,872 |
| Hawaii (HI) | 8.25% | $2,505 | $12,966 | 25.9% | $37,034 |
| Idaho (ID) | 5.80% | $1,761 | $12,222 | 24.4% | $37,778 |
| Illinois (IL) | 4.95% | $1,503 | $11,964 | 23.9% | $38,036 |
| Indiana (IN) | 3.05% | $926 | $11,387 | 22.8% | $38,613 |
| Iowa (IA) | 5.70% | $1,731 | $12,192 | 24.4% | $37,808 |
| Kansas (KS) | 5.70% | $1,731 | $12,192 | 24.4% | $37,808 |
| Kentucky (KY) | 4.00% | $1,215 | $11,676 | 23.4% | $38,324 |
| Louisiana (LA) | 4.25% | $1,291 | $11,752 | 23.5% | $38,248 |
| Maine (ME) | 7.15% | $2,171 | $12,632 | 25.3% | $37,368 |
| Maryland (MD) | 5.75% | $1,746 | $12,207 | 24.4% | $37,793 |
| Massachusetts (MA) | 5.00% | $1,518 | $11,979 | 24.0% | $38,021 |
| Michigan (MI) | 4.25% | $1,291 | $11,752 | 23.5% | $38,248 |
| Minnesota (MN) | 7.85% | $2,384 | $12,845 | 25.7% | $37,155 |
| Mississippi (MS) | 5.00% | $1,518 | $11,979 | 24.0% | $38,021 |
| Missouri (MO) | 4.95% | $1,503 | $11,964 | 23.9% | $38,036 |
| Montana (MT) | 6.75% | $2,050 | $12,511 | 25.0% | $37,489 |
| Nebraska (NE) | 6.64% | $2,016 | $12,477 | 25.0% | $37,523 |
| Nevada (NV) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| New Hampshire (NH) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| New Jersey (NJ) | 6.37% | $1,934 | $12,395 | 24.8% | $37,605 |
| New Mexico (NM) | 5.90% | $1,792 | $12,253 | 24.5% | $37,747 |
| New York (NY) | 6.85% | $2,080 | $12,541 | 25.1% | $37,459 |
| North Carolina (NC) | 3.99% | $1,212 | $11,673 | 23.3% | $38,327 |
| North Dakota (ND) | 1.95% | $592 | $11,053 | 22.1% | $38,947 |
| Ohio (OH) | 3.50% | $1,063 | $11,524 | 23.0% | $38,476 |
| Oklahoma (OK) | 4.75% | $1,442 | $11,903 | 23.8% | $38,097 |
| Oregon (OR) | 9.90% | $3,006 | $13,467 | 26.9% | $36,533 |
| Pennsylvania (PA) | 3.07% | $932 | $11,393 | 22.8% | $38,607 |
| Rhode Island (RI) | 5.99% | $1,819 | $12,280 | 24.6% | $37,720 |
| South Carolina (SC) | 6.50% | $1,974 | $12,435 | 24.9% | $37,565 |
| South Dakota (SD) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| Tennessee (TN) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| Texas (TX) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| Utah (UT) | 4.65% | $1,412 | $11,873 | 23.7% | $38,127 |
| Vermont (VT) | 6.60% | $2,004 | $12,465 | 24.9% | $37,535 |
| Virginia (VA) | 5.75% | $1,746 | $12,207 | 24.4% | $37,793 |
| Washington (WA) | No tax | $0 | $10,461 | 20.9% | $39,539 |
| West Virginia (WV) | 6.50% | $1,974 | $12,435 | 24.9% | $37,565 |
| Wisconsin (WI) | 5.30% | $1,609 | $12,070 | 24.1% | $37,930 |
| Wyoming (WY) | No tax | $0 | $10,461 | 20.9% | $39,539 |
Important Notes About State Taxes
- Rates shown are approximate flat/effective rates. Many states have progressive brackets — actual tax may vary.
- Some states (NH, TN historically) only tax interest and dividend income, not earned income.
- Local taxes (city, county) are not included. NYC, for example, adds 3-3.9% on top of NY state tax.
- State tax is deductible on your federal return if you itemize (SALT deduction, capped at $10,000).
How State Taxes Affect Side Hustlers
While federal taxes and self-employment tax are the biggest components of a side hustler's tax burden, state income tax can add a significant additional cost. In high-tax states like California (9.3%), Oregon (9.9%), and New York (6.85% + NYC local), state taxes can consume an additional 5-10% of your income.
Conversely, living in a no-income-tax state (Texas, Florida, Nevada, etc.) means every dollar earned from your side hustle avoids state taxation entirely. On $50,000 of side hustle income, the difference between Texas (0%) and California (9.3%) is roughly $3,000-$4,000 in state taxes.
States With No Income Tax
Alaska
0% income tax
Florida
0% income tax
Nevada
0% income tax
New Hampshire
0% income tax
South Dakota
0% income tax
Tennessee
0% income tax
Texas
0% income tax
Washington
0% income tax
Wyoming
0% income tax
Note: New Hampshire and Washington have no income tax on earned income. Washington does have a 7% capital gains tax on gains over $270,000. New Hampshire taxes interest and dividends at 3% (phasing out).
Flat Tax vs. Progressive Tax States
States use two approaches to income tax:
- Flat tax states (e.g., Illinois 4.95%, Colorado 4.4%, Utah 4.65%): Same rate regardless of income. Simple to calculate but proportionally higher for lower earners.
- Progressive tax states (e.g., California, New York, Minnesota): Higher rates on higher income. May be lower for small side hustles but increases as income grows.
The rates in our table are effective/approximate rates. For progressive states, your actual rate depends on your total taxable income level.
Frequently Asked Questions
Which states have no income tax?
Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire and Tennessee historically taxed interest and dividends but have phased those taxes out.
Do I pay state tax on side hustle income?
Yes, if your state has an income tax. Side hustle income (self-employment income) is treated the same as other earned income for state tax purposes. You report it on your state return along with W-2 income.
What if I work in a different state than where I live?
Generally, you pay state tax where you live (resident state). Some states also tax income earned within their borders, but most have reciprocal agreements. For remote freelance work, you typically pay tax in your state of residence.
Can I deduct state taxes on my federal return?
Yes, if you itemize deductions. The SALT (State and Local Tax) deduction lets you deduct state income taxes paid, but it's capped at $10,000 per year ($5,000 if married filing separately) under current tax law through 2025.
Do states have self-employment tax?
No. Self-employment tax (15.3%) is a federal tax only. States do not impose a separate self-employment tax. However, your net SE income is subject to your state's income tax rate.
Should I move to a no-income-tax state to save on side hustle taxes?
It depends on the full picture. No-income-tax states may have higher property taxes or sales taxes. Moving just for tax savings on a moderate side hustle may not offset the cost. However, for high earners in high-tax states, the savings can be substantial.
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Self-Employment Tax Calculator
Federal SE tax breakdown
1099 Tax Calculator
Full 1099 income tax calculation
Deduction Estimator
Reduce your taxable income
Sales Tax for Freelancers
The other state tax — on what you sell