You need to know that some big changes are coming to taxes at the state level in 2026. The Tax Foundation explains:
Forty-three states will ring in 2026 with notable tax changes. Eight states will see reduced individual income tax rates in the new year, and one of them (Ohio) will transition to a single-rate income tax. Four states will see reduced corporate income tax rates. Generally, state tax changes take effect either at the start of the calendar year (January 1) or at the start of the fiscal year (July 1 for most states), with rate changes for major taxes typically implemented effective January 1—either prospectively, as in these cases, or retroactively, as may happen under legislation enacted in the new year.
As we head into 2026, tax competition across the states is evident. Another year has brought a further wave of pro-growth tax reforms. Many of the tax changes effective as of January 1, 2026, demonstrate that states continue to embrace reforms that will give them a competitive edge and promote continued economic growth for years to come.
Big changes to income taxes at the state level include:
| State | 2025 | 2026 |
|---|---|---|
| Georgia | 5.19% | 5.09% |
| Indiana | 3.00% | 2.95% |
| Kentucky | 4.00% | 3.50% |
| Mississippi | 4.40% | 4.00% |
| Montana | 5.90% | 5.65% |
| Nebraska | 5.20% | 4.55% |
| North Carolina | 4.25% | 3.99% |
| Ohio | 3.125% | 2.75% |
| Oklahoma | 4.75% | 4.50% |
Action Line: When politicians in your state look at you like a piggy bank with which they can fund their own agenda, you might want to look for a better America. Start your search with my 2025 Super States, and click here to subscribe to my free monthly Survive & Thrive letter to be among the first to see my upcoming 2026 Super States release.
