These States Are Cutting Taxes in 2025
Category: Best Retirement Towns and States
February 13, 2025 — Good news is coming to 8 states this year when it comes to income taxes. It is part of a trend to lower taxes, make themselves more competitive, and enjoy the surpluses many of them experienced from the Covid years. Others, though, are concerned that the lower taxes will result in the cutting of public services. Seven of the 8 states that lowered their rates are controlled by Republicans.
Most of the reductions were relatively minor, usually less than a half a percentage point. Two of the states have moved to a flat tax instead of income brackets.
Comments on "These States Are Cutting Taxes in 2025"
Doug says:
I think you may have forgotten Texas as a no income tax state.
Admin says:
We sure did. Thanks for the correction!
Tony says:
Washington has no income tax, but as of 2023 it has adopted a capital gains tax of 7% on sale gains of $250,000 or more. Of course, it doesn’t apply to retirement accounts like traditional 401Ks and traditional IRAs since those are treated as income…New Hampshire is going the other way, gradually phasing out its income tax on passive income and profit and will become the first State in the lower 48 to have no income tax or sales tax. However, neither State is a cheap place to live for average retirees.
Chuck says:
PA has no state income tax on retirement income (including 401k's, pensions & Social Security).