Flat Tax States
Last Updated: January 2026
Sixteen states use a flat (single-rate) income tax system. This page provides the 2026 rates and special considerations for each flat tax state.
2026 Flat Tax Rates
| State | 2026 Rate | Withholding Rate | Notes |
|---|---|---|---|
| Arizona | 2.5% | Employee-elected | Employees choose withholding percentage |
| Colorado | 4.40% | 4.40% | May reduce to 4.25% if revenue triggers met |
| Georgia | 5.09% | 5.09% | Scheduled to decrease toward 4.99% |
| Idaho | 5.3% | 5.3% | Converted from progressive system in 2025 |
| Illinois | 4.95% | 4.95% | |
| Indiana | 2.95% | 2.95% | Plus mandatory county income tax |
| Iowa | 3.80% | 3.80% | Continuing phased reductions |
| Kentucky | 3.5% | 3.5% | Reduced from 4.0% in 2025 |
| Louisiana | 3.0% | 3.09% | Withhold at 3.09% per state guidance |
| Massachusetts | 5.0% | 5.0% | Plus 4% surtax on income over $1.1M |
| Michigan | 4.25% | 4.25% | |
| Mississippi | 4.0% | 4.0% | Applies to income over $10,000 |
| North Carolina | 3.99% | 4.09% | Withhold at 4.09% per state guidance |
| Ohio | 2.75% | 2.75% | NEW for 2026; applies to income over $26,050 |
| Pennsylvania | 3.07% | 3.07% | Plus mandatory local EIT in most areas |
| Utah | 4.5% | 4.5% | Reduced from 4.55% in 2025 |
State Details
Arizona (2.5%)
Arizona allows employees to elect their own withholding percentage. Employees complete Arizona Form A-4 to specify their withholding rate. Common elections range from 0.5% to 3.5%.
Special Requirements:
- State-specific form: Arizona Form A-4
- Employee-elected withholding percentage
- Default rate if no election: 2.0%
Colorado (4.40%)
Colorado's flat tax rate may reduce to 4.25% if state revenue triggers are met. Monitor state announcements for mid-year changes.
Special Requirements:
- Uses federal W-4 for state withholding
- Possible mid-year rate adjustment
Georgia (5.09%)
Georgia transitioned to a flat tax system and has scheduled rate reductions. The rate is expected to decrease toward 4.99% in coming years.
Special Requirements:
- State-specific form: Georgia Form G-4
- Annual rate adjustments possible
Idaho (5.3%)
Idaho converted from a progressive tax system to a flat tax effective January 1, 2025.
Special Requirements:
- Uses federal W-4 for state withholding
Illinois (4.95%)
Illinois has maintained a flat tax rate. The state constitution requires a flat rate structure.
Special Requirements:
- State-specific form: Illinois Form IL-W-4
- Constitutional flat tax requirement
Indiana (2.95%)
Indiana's flat tax decreased from 3.00% to 2.95% for 2026. All 92 Indiana counties also impose county income taxes, which must be withheld in addition to state tax.
Special Requirements:
- State-specific form: Indiana Form WH-4
- Mandatory county income tax (rates vary by county)
- See Local Tax Summary for county rates
Iowa (3.80%)
Iowa continues phased reductions toward a target rate of 3.5%. Monitor for future rate changes.
Special Requirements:
- State-specific form: Iowa Form IA W-4
- Phased rate reductions continuing
Kentucky (3.5%)
Kentucky's flat tax rate was reduced from 4.0% to 3.5% for 2026.
Special Requirements:
- Uses federal W-4 for state withholding
Louisiana (3.0%)
Louisiana's statutory rate is 3.0%, but the state directs employers to withhold at 3.09% to account for limitations on deductions.
Special Requirements:
- State-specific form: Louisiana Form L-4
- Withhold at 3.09% (not 3.0%)
Massachusetts (5.0%)
Massachusetts has a 5.0% flat tax plus a 4% surtax (known as the "Millionaire's Tax") on annual income exceeding $1.1 million. The surtax threshold is indexed to inflation.
Special Requirements:
- State-specific form: Massachusetts Form M-4
- 4% surtax on income over $1.1M (indexed annually)
Michigan (4.25%)
Michigan has maintained a stable flat tax rate. Some cities impose additional local income taxes.
Special Requirements:
- State-specific form: Michigan Form MI-W4
- Some cities have local income taxes
Mississippi (4.0%)
Mississippi applies its 4.0% flat tax only to income exceeding $10,000. The first $10,000 is exempt.
Special Requirements:
- Uses federal W-4 for state withholding
- $10,000 exemption threshold
- Rate reduced from 4.4% in 2025
North Carolina (3.99%)
North Carolina's statutory rate is 3.99%, but the state directs employers to withhold at 4.09% to ensure adequate withholding.
Special Requirements:
- Uses federal W-4 for state withholding
- Withhold at 4.09% (not 3.99%)
- Rate reduced from 4.25% in 2025
Ohio (2.75%)
NEW FOR 2026: Ohio replaced its progressive tax system with a flat tax of 2.75% on income exceeding $26,050. The first $26,050 is exempt.
Special Requirements:
- Uses federal W-4 for state withholding
- $26,050 exemption threshold
- Major change from previous progressive system
- Many cities have local income taxes
Pennsylvania (3.07%)
Pennsylvania has a 3.07% flat state tax. Most Pennsylvania municipalities also impose a local Earned Income Tax (EIT), making it critical to set up both state and local withholding.
Special Requirements:
- Uses federal W-4 for state withholding
- Mandatory local EIT in most areas
- See Local Tax Summary for local rates
Utah (4.5%)
Utah's flat tax rate decreased from 4.55% to 4.5% for 2026.
Special Requirements:
- Uses federal W-4 for state withholding
Related Topics
- State Income Tax Withholding Guide Overview
- No Income Tax States
- Progressive Tax States
- States Requiring State-Specific W-4
- Local Tax Summary