Federal vs State Income Tax: What's the Difference?
5 min read · Updated for 2026
When you look at your paycheck, two separate governments are taking a cut: the federal government and your state government. They're calculated independently, with different rules, different brackets, and different standard deductions. Understanding how they interact is essential for estimating your real take-home pay — especially if you're comparing job offers in different states.
Federal Income Tax: The Baseline
Federal income tax is the same regardless of which state you live in. Every U.S. taxpayer uses the same IRS brackets, the same standard deduction, and the same rules. For 2026, the federal income tax brackets for single filers are:
| Taxable Income (Single) | Tax Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,925 – $48,475 | 12% |
| $48,475 – $103,350 | 22% |
| $103,350 – $197,300 | 24% |
| $197,300 – $250,525 | 32% |
| $250,525 – $626,350 | 35% |
| Over $626,350 | 37% |
The federal standard deduction for 2026 is $14,600 for single filers and $29,200 for married filing jointly. This amount is subtracted from your gross income before applying the brackets. So if you earn $70,000, your federal taxable income is $70,000 − $14,600 = $55,400.
It's important to understand that these are marginal rates — you pay 10% only on the first $11,925, 12% on the next slice, 22% on the next, and so on. Earning $50,000 does not mean you pay 22% on all $50,000.
State Income Tax: Where It Gets Complicated
State income taxes are set by each state independently. The variation is enormous:
- No income tax (9 states): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. In these states, your take-home pay is identical whether you earn $50,000 or $150,000 — the state takes nothing.
- Flat tax: Some states charge the same rate on all income regardless of how much you earn. Examples: Illinois (4.95%), Massachusetts (5%), Colorado (4.4%), Arizona (2.5%).
- Progressive brackets: Most states use a graduated system like the federal government, where higher income is taxed at higher rates. California's top rate is 13.3%. Minnesota's is 9.85%. North Carolina is 3.99%.
States also have their own standard deductions — and they vary widely. Some states match the federal deduction ($16,100 in Idaho, Colorado, Iowa). Others use a fraction of it. A few have no standard deduction at all.
How They Calculate Differently
Here's a side-by-side example for a single filer earning $80,000 in Texas vs California in 2026:
| Texas | California | |
|---|---|---|
| Gross pay | $80,000 | $80,000 |
| Federal income tax | $9,302 | $9,302 |
| Social Security | $4,960 | $4,960 |
| Medicare | $1,160 | $1,160 |
| State income tax | $0 | ~$4,243 |
| California SDI | $0 | $880 |
| Take-home pay | $64,578 | $59,455 |
Same salary, same federal taxes — but a California worker takes home roughly $5,100 less per year than a Texas worker at $80,000. At $150,000, that gap grows to over $12,000 annually.
Local Income Taxes: A Third Layer
Several states allow cities and counties to charge their own income taxes on top of state taxes. This creates a third layer of tax some workers pay:
- New York City: Up to 3.876% city income tax on top of NY state tax (up to 10.9%)
- Philadelphia: 3.75% city wage tax for residents
- Louisville, KY: 2.2% occupational license fee on wages
- Detroit, MI: 2.4% city income tax for residents
- Columbus, OH: 2.5% city income tax
- Maryland counties: Every Maryland county charges 2.25–3.2% on top of state tax
When comparing salaries in different locations, it's worth researching whether the specific city charges a local tax — not just the state rate.
Which State Has Your Old Salary?
If you're relocating or comparing a job offer in another state, the state income tax difference can be as large or larger than a pay raise. Moving from New York to Texas on an $80,000 salary is effectively a $9,000+ raise in take-home pay — without any nominal salary change.
Use the Pay-Breakdown paycheck calculator to compare your take-home in any two states side by side. Select your state, enter your salary, and see exactly what you'd keep.