Self-Employed State Income Tax Rates

Navigating state income taxes as a self-employed individual can be challenging. Tax rates, deductions, and obligations vary widely across the U.S., making it essential to understand the rules in your state.

Our guide covers all 50 states, breaking down the tax rates, filing obligations, available deductions and credits, and any special considerations you should know as a self-employed taxpayer. Whether you’re a freelancer, contractor, or small business owner, this guide provides the insights you need to stay compliant and maximize your tax savings.

Self-Employed Income Tax by State

Do you need to pay state income tax if you're self employed? yes..for most. In this section, we provide a detailed overview of self-employment income taxes for each state. You’ll find essential information on tax rates, income levels, filing requirements, and any available deductions or credits specific to self-employed individuals. We also highlight special considerations that could impact your tax obligations based on where you live and work.

Whether you’re looking to optimize your tax savings or ensure compliance, this breakdown serves as a resource for understanding your state’s self-employment tax landscape.

Let's break it down by state

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California State Income Tax

State Income Tax Rate

• California has a progressive income tax system with the following rates for individuals, including self-employed:some text
  • 1% on income up to $10,099
  • 2% on income from $10,100 to $23,942
  • 4% on income from $23,943 to $37,788
  • 6% on income from $37,789 to $52,455
  • 8% on income from $52,456 to $66,295
  • 9.3% on income from $66,296 to $338,639
  • 10.3% on income from $338,640 to $406,364
  • 11.3% on income from $406,365 to $677,275
  • 12.3% on income over $677,276
  • Additional 1% mental health services tax on income over $1,000,000.

Self-Employment Tax Obligations:

• Self-employed individuals must pay state income tax along with federal self-employment tax.
• Estimated tax payments are required if the expected state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums.
• California Earned Income Tax Credit (CalEITC): Available for low-income individuals, including the self-employed.
• Young Child Tax Credit (YCTC): A supplement to CalEITC for eligible individuals.

Special Considerations:

• High-income earners may be subject to additional taxes due to California’s high marginal tax rates.
• The state does not conform to the federal Qualified Business Income Deduction (QBID).

New York State Income Tax

State Income Tax Rate

• New York’s progressive income tax rates for 2024 are:some text
  • 4% on income up to $8,500
  • 4.5% on income from $8,501 to $11,700
  • 5.25% on income from $11,701 to $13,900
  • 5.85% on income from $13,901 to $21,400
  • 6.25% on income from $21,401 to $80,650
  • 6.85% on income from $80,651 to $215,400
  • 9.65% on income from $215,401 to $1,077,550
  • 10.3% on income from $1,077,551 to $5,000,000
  • 10.9% on income over $5,000,000

Self-Employment Tax Obligations:

• Self-employed individuals in New York pay both state income tax and federal self-employment tax.
• Quarterly estimated payments are required if the state tax liability is expected to be over $300.

Deductions and Credits:

• New York State Family Tax Relief Credit: Available to eligible families.
• Empire State Child Credit: Available for taxpayers with qualifying children.
• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.

Special Considerations:

• Additional local income taxes apply in New York City and Yonkers.
• High-income self-employed individuals may face significant state tax liabilities.

Texas State Income Tax

State Income Tax Rate:

• Texas does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in Texas are responsible for federal self-employment taxes.
• No state self-employment tax, but they must pay federal quarterly estimated taxes if applicable.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Texas imposes a franchise tax on businesses, but it generally does not apply to sole proprietors.
• Self-employed individuals should focus on federal tax obligations.

Florida State Income Tax

State Income Tax Rate:

• Florida does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in Florida are responsible for federal self-employment taxes.
• No state self-employment tax, but they must pay federal quarterly estimated taxes if applicable.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Florida’s lack of income tax is advantageous for self-employed individuals, allowing them to keep more of their earnings.
• Focus on meeting federal tax obligations, including estimated quarterly payments.

Illinois State Income Tax

State Income Tax Rate:

• Illinois has a flat income tax rate of 4.95% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if the expected state tax liability is $1,000 or more.

Deductions and Credits:

• Property Tax Credit: Self-employed homeowners may be eligible for a property tax credit.
• Education Expense Credit: Available for those with qualifying educational expenses for children.
• Self-Employed Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.

Special Considerations:

• Illinois allows the deduction of some federally deductible expenses, but not all. Accurate record-keeping is essential.
• Illinois does not offer many additional state-specific credits or deductions for self-employed individuals.

Washington State Income Tax

State Income Tax Rate:

• Washington does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in Washington must pay federal self-employment taxes.
• The state imposes a Business & Occupation (B&O) tax on gross business receipts, which may apply to self-employed individuals based on their business activity.

Deductions and Credits:

• There are no state income tax deductions or credits, but certain deductions may apply to the B&O tax, depending on the type of business.

Special Considerations:

• The B&O tax is based on gross receipts rather than net income, which can impact self-employed individuals with high expenses.
• Self-employed individuals should be aware of B&O tax filing requirements and deadlines.

New Jersey State Income Tax

State Income Tax Rate:

• New Jersey has a progressive income tax system with the following rates for individuals, including self-employed:some text
  • 1.4% on income up to $20,000
  • 1.75% on income from $20,001 to $35,000
  • 3.5% on income from $35,001 to $40,000
  • 5.525% on income from $40,001 to $75,000
  • 6.37% on income from $75,001 to $500,000
  • 8.97% on income from $500,001 to $1,000,000
  • 10.75% on income over $1,000,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if the expected annual state tax liability is $400 or more.

Deductions and Credits:

• Property Tax Deduction: Up to $15,000 for property taxes paid on a principal residence.
• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums for themselves and their families.
• New Jersey Earned Income Tax Credit (NJEITC): Available to qualifying low-income individuals.

Special Considerations:

• Self-employed individuals in New Jersey must also pay a gross income tax on their earnings, in addition to federal self-employment tax.
• Accurate record-keeping is crucial due to the complex nature of deductions and credits in New Jersey.

Pennsylvania State Income Tax

State Income Tax Rate:

• Pennsylvania has a flat state income tax rate of 3.07% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated payments are required if the expected annual state tax liability is $70 or more.

Deductions and Credits:

• PA State Property Tax/Rent Rebate Program: Available to eligible individuals, including the self-employed.
• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.

Special Considerations:

• Local Earned Income Taxes may apply depending on where the self-employed individual lives or works. These rates vary by municipality and can significantly impact total tax obligations.
• Pennsylvania’s tax code does not provide many additional deductions or credits specific to self-employed individuals.

Ohio State Income Tax

State Income Tax Rate:

• Ohio has a progressive income tax system with the following rates:some text
  • 0% on income up to $25,000
  • 2.765% on income from $25,001 to $44,250
  • 3.226% on income from $44,251 to $88,450
  • 3.688% on income from $88,451 to $110,650
  • 3.99% on income over $110,650

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is $500 or more.

Deductions and Credits:

• Business Income Deduction: Up to $250,000 of business income may be deducted from taxable income for Ohio residents.
• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums.
• Earned Income Credit (EIC): Non-refundable credit based on a percentage of the federal EIC.

Special Considerations:

• Municipal income taxes may apply, and rates vary by city. Self-employed individuals should verify local tax obligations.
• Ohio’s Business Income Deduction can significantly reduce taxable income for qualifying individuals.

Georgia State Income Tax

State Income Tax Rate:

• Georgia has a progressive income tax system with the following rates:some text
  • 1% on income up to $750
  • 2% on income from $751 to $2,250
  • 3% on income from $2,251 to $3,750
  • 4% on income from $3,751 to $5,250
  • 5% on income from $5,251 to $7,000
  • 5.75% on income over $7,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Standard Deduction: $5,400 for single filers and $7,100 for married couples filing jointly.
• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums for themselves and their families.
• Retirement Savings Contributions Credit: Available to eligible individuals who make contributions to qualifying retirement plans.

Special Considerations:

• Georgia does not offer specific tax credits for self-employed individuals but provides general deductions that can reduce taxable income.
• Municipal or local business taxes may apply, depending on the city or county of residence.

North Carolina State Income Tax

State Income Tax Rate:

• North Carolina has a flat state income tax rate of 5.25% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Standard Deduction: $10,750 for single filers and $21,500 for married couples filing jointly.
• Child Deduction: Additional deduction for taxpayers with qualifying dependents.
• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums.

Special Considerations:

• North Carolina does not provide state-specific deductions or credits for self-employed individuals beyond the general ones.
• Local business taxes may apply, depending on the city or county.

Michigan State Income Tax

State Income Tax Rate:

• Michigan has a flat state income tax rate of 4.25% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Homestead Property Tax Credit: Available to eligible individuals, including self-employed.
• Self-Employed Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Michigan Earned Income Tax Credit (MI EITC): Based on a percentage of the federal EITC.

Special Considerations:

• Local income taxes may apply in certain cities, such as Detroit, Grand Rapids, and others.
• Michigan’s tax code does not offer many additional state-specific credits or deductions for self-employed individuals.

Virginia State Income Tax

State Income Tax Rate:

• Virginia has a progressive income tax system with the following rates:some text
  • 2% on income up to $3,000
  • 3% on income from $3,001 to $5,000
  • 5% on income from $5,001 to $17,000
  • 5.75% on income over $17,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $150.

Deductions and Credits:

• Standard Deduction: $4,500 for single filers and $9,000 for married couples filing jointly.
• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums.
• Virginia Earned Income Credit (EIC): Available to eligible low-income individuals.

Special Considerations:

• Virginia offers general deductions but does not have specific tax credits targeted at self-employed individuals.
• Local business taxes may apply, depending on the city or county.

Arizona State Income Tax

State Income Tax Rate:

• Arizona has a progressive income tax system with the following rates for 2024:some text
  • 2.59% on income up to $28,653
  • 3.34% on income from $28,654 to $57,305
  • 4.17% on income from $57,306 to $171,915
  • 4.50% on income over $171,916

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is $1,000 or more.

Deductions and Credits:

• Health Insurance Premium Deduction: Can deduct health insurance premiums paid for themselves and their families.
• Standard Deduction Increase for Charitable Contributions: Increased standard deduction for those who make charitable contributions.
• Private School Tuition Tax Credit: Available to taxpayers, including the self-employed, who contribute to qualifying tuition organizations.

Special Considerations:

• Arizona provides a tax credit for contributions to certified school tuition organizations, which can be beneficial for self-employed individuals looking for state tax savings.
• Local business taxes may apply, depending on the city or county of residence.

Colorado State Income Tax

State Income Tax Rate:

• Colorado has a flat state income tax rate of 4.4% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums for themselves and their families.
• Colorado Child Care Contribution Credit: Available to taxpayers who make contributions to child care organizations.
• Earned Income Tax Credit (EITC): Available to eligible low-income individuals.

Special Considerations:

• Local income taxes may apply in certain cities, such as Denver.
• Colorado’s flat tax rate simplifies calculations but does not provide many deductions specifically for self-employed individuals.

Massachusetts State Income Tax

State Income Tax Rate:

• Massachusetts has a flat state income tax rate of 5% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $400.

Deductions and Credits:

• Self-Employed Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Student Loan Interest Deduction: Available to individuals paying interest on student loans, including self-employed.
• Massachusetts Earned Income Credit: Based on a percentage of the federal EITC.

Special Considerations:

• Self-employed individuals in Massachusetts are subject to the same tax rate as other residents but do not have access to many additional credits or deductions.
• Local business taxes may apply depending on the city or town.

Tennessee State Income Tax

State Income Tax Rate:

• Tennessee does not have a general state income tax. However, it imposes the Hall income tax on certain interest and dividend income at a rate of 1% (phased out by 2021).

Self-Employment Tax Obligations:

• Self-employed individuals in Tennessee are responsible for federal self-employment taxes but do not have to pay state income tax on earned income.
• No additional state self-employment tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Tennessee has a favorable tax environment for self-employed individuals due to the lack of state income tax.
• Self-employed individuals should ensure compliance with federal tax obligations.

Maryland State Income Tax

State Income Tax Rate:

• Maryland has a progressive income tax system with the following rates:some text
  • 2% on income up to $1,000
  • 3% on income from $1,001 to $2,000
  • 4% on income from $2,001 to $3,000
  • 4.75% on income from $3,001 to $100,000
  • 5% on income from $100,001 to $125,000
  • 5.25% on income from $125,001 to $150,000
  • 5.5% on income from $150,001 to $250,000
  • 5.75% on income over $250,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Earned Income Credit: Available to eligible low-income individuals.
• Child and Dependent Care Credit: Available for individuals with qualifying child care expenses.

Special Considerations:

• Local income taxes apply in Maryland, with rates varying by county. These can significantly affect overall tax liability.
• Self-employed individuals should track all eligible expenses carefully to maximize deductions.

Nevada State Income Tax

State Income Tax Rate:

• Nevada does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in Nevada are responsible for federal self-employment taxes.
• No additional state self-employment tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Nevada’s lack of income tax is advantageous for self-employed individuals, allowing them to retain more of their earnings.
• Federal tax obligations and estimated payments must still be met.

Wisconsin State Income Tax

State Income Tax Rate:

• Wisconsin has a progressive income tax system with the following rates:some text
  • 3.54% on income up to $12,760
  • 4.65% on income from $12,761 to $25,520
  • 6.27% on income from $25,521 to $280,950
  • 7.65% on income over $280,951

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums for themselves and their families.
• Homestead Credit: Available to low-income homeowners and renters.
• Earned Income Tax Credit: Available to eligible low-income individuals.

Special Considerations:

• Self-employed individuals in Wisconsin should carefully track their expenses and deductions to minimize tax liability, especially given the relatively high top marginal rate.
• Local business taxes may apply, depending on the city or county.

Missouri State Income Tax

State Income Tax Rate:

• Missouri has a progressive income tax system with the following rates:some text
  • 1.5% on income up to $1,121
  • 2% on income from $1,122 to $2,242
  • 2.5% on income from $2,243 to $3,363
  • 3% on income from $3,364 to $4,484
  • 3.5% on income from $4,485 to $5,605
  • 4% on income from $5,606 to $6,726
  • 4.5% on income from $6,727 to $7,847
  • 5% on income from $7,848 to $8,968
  • 5.4% on income from $8,969 to $9,999
  • 5.5% on income over $10,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $100.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Missouri Earned Income Tax Credit (EITC): Available to eligible low-income individuals.
• Property Tax Credit: Available for eligible low-income or elderly individuals.

Special Considerations:

• Missouri’s relatively low top marginal tax rate is advantageous, but careful planning is still necessary to manage tax liabilities effectively.
• Local business taxes may apply depending on the city or county.

Alabama State Income Tax

State Income Tax Rate:

• Alabama has a progressive income tax system with the following rates:some text
  • 2% on income up to $500
  • 4% on income from $501 to $3,000
  • 5% on income over $3,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Standard Deduction: Up to $4,000 for single filers and $7,500 for married couples filing jointly.
• Personal Exemption: $1,500 for single filers and $3,000 for married couples filing jointly.

Special Considerations:

• Local occupational taxes may apply, depending on the city or county.
• Alabama does not have specific deductions or credits targeted at self-employed individuals beyond general deductions.

Alaska State Income Tax

State Income Tax Rate:

• Alaska does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in Alaska are responsible for federal self-employment taxes.
• No additional state self-employment tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Alaska’s lack of state income tax is beneficial for self-employed individuals, allowing them to keep more of their earnings.
• Focus on managing federal tax obligations, including estimated quarterly payments.

Arkansas State Income Tax

State Income Tax Rate:

• Arkansas has a progressive income tax system with the following rates:some text
  • 0% on income up to $4,499
  • 2% on income from $4,500 to $8,899
  • 3% on income from $8,900 to $13,399
  • 3.4% on income from $13,400 to $22,899
  • 5% on income from $22,900 to $38,999
  • 5.5% on income over $39,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Arkansas Earned Income Tax Credit (EITC): Available to eligible low-income individuals.
• State Property Tax Credit: Up to $375 for eligible property owners.

Special Considerations:

• Arkansas provides several general credits but does not have specific credits for self-employed individuals.
• Local business taxes may apply depending on the city or county.

Connecticut State Income Tax

State Income Tax Rate:

• Connecticut has a progressive income tax system with the following rates:some text
  • 3% on income up to $10,000
  • 5% on income from $10,001 to $50,000
  • 5.5% on income from $50,001 to $100,000
  • 6% on income from $100,001 to $200,000
  • 6.5% on income from $200,001 to $250,000
  • 6.9% on income from $250,001 to $500,000
  • 6.99% on income over $500,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Connecticut Earned Income Tax Credit (CT EITC): Available to eligible low-income individuals.
• Property Tax Credit: Up to $200 for eligible taxpayers.

Special Considerations:

• Connecticut’s high top marginal rate can significantly impact high-income self-employed individuals.
• Self-employed individuals should keep accurate records to maximize deductions and credits.

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Delaware State Income Tax

State Income Tax Rate:

• Delaware has a progressive income tax system with the following rates:some text
  • 2.2% on income up to $2,000
  • 3.9% on income from $2,001 to $5,000
  • 4.8% on income from $5,001 to $10,000
  • 5.2% on income from $10,001 to $20,000
  • 5.55% on income from $20,001 to $25,000
  • 6.6% on income from $25,001 to $60,000
  • 6.7% on income over $60,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $400.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Delaware Earned Income Tax Credit (EITC): Available to eligible low-income individuals.
• School Property Tax Credit: Available to seniors and disabled residents.

Special Considerations:

• Delaware does not provide specific tax credits for self-employed individuals beyond general credits and deductions.
• Local business taxes may apply depending on the city or county.

Hawaii State Income Tax

State Income Tax Rate:

• Hawaii has a progressive income tax system with the following rates:some text
  • 1.4% on income up to $2,400
  • 3.2% on income from $2,401 to $4,800
  • 5.5% on income from $4,801 to $9,600
  • 6.4% on income from $9,601 to $14,400
  • 6.8% on income from $14,401 to $19,200
  • 7.2% on income from $19,201 to $24,000
  • 7.6% on income from $24,001 to $36,000
  • 7.9% on income from $36,001 to $48,000
  • 8.25% on income from $48,001 to $150,000
  • 9% on income from $150,001 to $175,000
  • 10% on income from $175,001 to $200,000
  • 11% on income over $200,000

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Hawaii Earned Income Tax Credit (HI EITC): Available to eligible low-income individuals.
• Child and Dependent Care Credit: Available to individuals with qualifying dependents.

Special Considerations:

• Hawaii’s high top marginal rate can significantly impact high-income self-employed individuals.
• Self-employed individuals should keep detailed records to maximize deductions and credits.

Idaho State Income Tax

State Income Tax Rate:

• Idaho has a progressive income tax system with the following rates:some text
  • 1% on income up to $1,587
  • 3% on income from $1,588 to $4,761
  • 4.5% on income from $4,762 to $6,349
  • 5.5% on income from $6,350 to $7,937
  • 6.5% on income from $7,938 to $11,901
  • 6.925% on income over $11,902

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Idaho Child Tax Credit: $205 per qualifying child.
• Grocery Credit: $100 per person, refundable for low-income taxpayers.

Special Considerations:

• Idaho provides several general credits but does not have specific credits for self-employed individuals.
• Local business taxes may apply depending on the city or county.

Indiana State Income Tax

State Income Tax Rate:

• Indiana has a flat state income tax rate of 3.23% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $400.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Indiana Earned Income Tax Credit (IN EITC): Available to eligible low-income individuals.
• Renter’s Deduction: Up to $3,000 for eligible renters.

Special Considerations:

• County income taxes may apply, varying by location, and can impact overall tax liability.
• Indiana’s flat tax rate simplifies calculations but requires accurate tracking of deductions to minimize tax burden.

Iowa State Income Tax

State Income Tax Rate:

• Iowa has a progressive income tax system with the following rates:some text
  • 0.33% on income up to $1,743
  • 0.67% on income from $1,744 to $3,486
  • 2.25% on income from $3,487 to $6,972
  • 4.14% on income from $6,973 to $15,687
  • 5.63% on income from $15,688 to $26,145
  • 5.96% on income from $26,146 to $34,860
  • 6.25% on income from $34,861 to $52,290
  • 7.44% on income from $52,291 to $78,435
  • 8.53% on income over $78,436

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $200.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Iowa Earned Income Tax Credit (IA EITC): Available to eligible low-income individuals.
• Tuition and Textbook Credit: 25% of the first $1,000 paid for each dependent in K-12 education.

Special Considerations:

• Iowa’s relatively high top marginal rate can significantly impact high-income self-employed individuals.
• Local surtaxes may apply depending on the school district of residence.

Kansas State Income Tax

State Income Tax Rate:

• Kansas has a progressive income tax system with the following rates:some text
  • 3.1% on income up to $15,000
  • 5.25% on income from $15,001 to $30,000
  • 5.7% on income over $30,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Kansas Earned Income Tax Credit (KS EITC): Available to eligible low-income individuals.
• Child and Dependent Care Credit: Available to individuals with qualifying dependents.

Special Considerations:

• Kansas’ flat tax rate and lower marginal rates are beneficial for self-employed individuals compared to other states with higher top rates.
• Local business taxes may apply depending on the city or county.

Kentucky State Income Tax

State Income Tax Rate:

• Kentucky has a flat state income tax rate of 5% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Kentucky Earned Income Tax Credit (KY EITC): Available to eligible low-income individuals.
• Kentucky Family Size Tax Credit: Available based on family size and income.

Special Considerations:

• Local occupational taxes may apply, depending on the city or county of residence.
• Kentucky’s flat tax rate simplifies calculations but may be relatively high for lower-income self-employed individuals.

Louisiana State Income Tax

State Income Tax Rate:

• Louisiana has a progressive income tax system with the following rates:some text
  • 2% on income up to $12,500
  • 4% on income from $12,501 to $50,000
  • 6% on income over $50,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Louisiana Earned Income Tax Credit (LA EITC): Available to eligible low-income individuals.
• School Expense Deduction: 50% of educational expenses, up to $5,000 per child.

Special Considerations:

• Louisiana’s relatively low marginal tax rates are beneficial for self-employed individuals compared to other states with higher top rates.
• Local sales and occupational taxes may apply depending on the city or county.

Maine State Income Tax

State Income Tax Rate:

• Maine has a progressive income tax system with the following rates:some text
  • 5.8% on income up to $23,000
  • 6.75% on income from $23,001 to $54,450
  • 7.15% on income over $54,451

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Maine Earned Income Tax Credit (ME EITC): Available to eligible low-income individuals.
• Education Opportunity Tax Credit: Available to eligible individuals who obtained a degree from a Maine institution.

Special Considerations:

• Maine’s relatively high top marginal rate can significantly impact high-income self-employed individuals.
• Self-employed individuals should keep detailed records to maximize deductions and credits.

Minnesota State Income Tax

State Income Tax Rate:

• Minnesota has a progressive income tax system with the following rates:some text
  • 5.35% on income up to $28,080
  • 6.8% on income from $28,081 to $92,230
  • 7.85% on income from $92,231 to $171,220
  • 9.85% on income over $171,221

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Minnesota Working Family Credit: Similar to the federal EITC, available to eligible low-income individuals.
• K-12 Education Credit: Available for educational expenses for qualifying dependents.

Special Considerations:

• Minnesota’s high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

Mississippi State Income Tax

State Income Tax Rate:

• Mississippi has a progressive income tax system with the following rates:some text
  • 0% on income up to $5,000
  • 4% on income from $5,001 to $10,000
  • 5% on income over $10,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $200.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Mississippi Earned Income Tax Credit (MS EITC): Available to eligible low-income individuals.
• Education Expense Credit: Available for parents and guardians of K-12 students.

Special Considerations:

• Mississippi’s relatively low marginal rates are advantageous for self-employed individuals compared to other states with higher top rates.
• Local business taxes may apply depending on the city or county.

Montana State Income Tax

State Income Tax Rate:

• Montana has a progressive income tax system with the following rates:some text
  • 1% on income up to $3,100
  • 2% on income from $3,101 to $5,400
  • 3% on income from $5,401 to $8,200
  • 4% on income from $8,201 to $11,100
  • 5% on income from $11,101 to $14,300
  • 6% on income from $14,301 to $18,400
  • 6.75% on income over $18,401

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Montana Earned Income Tax Credit (MT EITC): Available to eligible low-income individuals.
• Property Tax Assistance Program (PTAP): Provides property tax relief for low-income residents.

Special Considerations:

• Montana does not have a state sales tax, which can be beneficial for self-employed individuals purchasing business supplies.
• Local business taxes may apply depending on the city or county.

Nebraska State Income Tax

State Income Tax Rate:

• Nebraska has a progressive income tax system with the following rates:some text
  • 2.46% on income up to $3,340
  • 3.51% on income from $3,341 to $19,990
  • 5.01% on income from $19,991 to $32,210
  • 6.84% on income over $32,211

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Nebraska Earned Income Tax Credit (NE EITC): Available to eligible low-income individuals.
• Homestead Exemption: Available for eligible low-income homeowners, seniors, and disabled individuals.

Special Considerations:

• Nebraska’s relatively high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

New Hampshire State Income Tax

State Income Tax Rate:

• New Hampshire does not have a state income tax on wages and salaries but imposes a 5% tax on interest and dividends over $2,400 for single filers and $4,800 for joint filers.

Self-Employment Tax Obligations:

• Self-employed individuals do not pay state income tax on their earnings but must pay federal self-employment tax.
• No additional state self-employment tax, but interest and dividend income may be subject to state tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• New Hampshire’s lack of income tax is advantageous for self-employed individuals, but they should be aware of the interest and dividend tax.
• Local business taxes, such as the Business Profits Tax and Business Enterprise Tax, may apply to certain businesses.

New Mexico State Income Tax

State Income Tax Rate:

• New Mexico has a progressive income tax system with the following rates:some text
  • 1.7% on income up to $5,500
  • 3.2% on income from $5,501 to $11,000
  • 4.7% on income from $11,001 to $16,000
  • 4.9% on income from $16,001 to $210,000
  • 5.9% on income over $210,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• New Mexico Working Families Tax Credit (WFTC): Based on a percentage of the federal EITC, available to eligible low-income individuals.
• Low-Income Comprehensive Tax Rebate (LICTR): Available to eligible low-income residents.

Special Considerations:

• New Mexico provides several general credits but does not have specific credits for self-employed individuals.
• Local business taxes may apply depending on the city or county.

North Dakota State Income Tax

State Income Tax Rate:

• North Dakota has a progressive income tax system with the following rates:some text
  • 1.1% on income up to $40,125
  • 2.04% on income from $40,126 to $97,150
  • 2.27% on income from $97,151 to $202,650
  • 2.64% on income from $202,651 to $440,600
  • 2.9% on income over $440,601

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• North Dakota Earned Income Tax Credit (ND EITC): Available to eligible low-income individuals.
• Homestead Property Tax Credit: Available for eligible low-income homeowners and disabled individuals.

Special Considerations:

• North Dakota’s relatively low top marginal rate is advantageous for high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

Oklahoma State Income Tax

State Income Tax Rate:

•  Oklahoma has a progressive income tax system with the following rates:some text
  • 0.5% on income up to $1,000
  • 1% on income from $1,001 to $2,500
  • 2% on income from $2,501 to $3,750
  • 3% on income from $3,751 to $4,900
  • 4% on income from $4,901 to $7,200
  • 5% on income over $7,201

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Oklahoma Earned Income Tax Credit (OK EITC): Available to eligible low-income individuals.
• Child and Dependent Care Credit: Available for individuals with qualifying dependents.

Special Considerations:

• Oklahoma’s relatively low top marginal rate is advantageous for self-employed individuals compared to other states with higher top rates.
• Local business taxes may apply depending on the city or county.

Oregon State Income Tax

State Income Tax Rate:

• Oregon has a progressive income tax system with the following rates:some text
  • 4.75% on income up to $3,750
  • 6.75% on income from $3,751 to $9,450
  • 8.75% on income from $9,451 to $125,000
  • 9.9% on income over $125,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Oregon Earned Income Tax Credit (OR EITC): Available to eligible low-income individuals.
• Working Family Household and Dependent Care Credit: Available for individuals with qualifying dependents.

Special Considerations:

• Oregon’s high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

Rhode Island State Income Tax

State Income Tax Rate:

• Rhode Island has a progressive income tax system with the following rates:some text
  • 3.75% on income up to $68,200
  • 4.75% on income from $68,201 to $155,050
  • 5.99% on income over $155,051

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $250.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Rhode Island Earned Income Tax Credit (RI EITC): Available to eligible low-income individuals.
• Property Tax Relief Credit: Available for eligible low-income homeowners and renters.

Special Considerations:

• Rhode Island’s relatively high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

South Carolina State Income Tax

State Income Tax Rate:

• South Carolina has a progressive income tax system with the following rates:some text
  • 0% on income up to $3,070
  • 3% on income from $3,071 to $6,150
  • 4% on income from $6,151 to $9,230
  • 5% on income from $9,231 to $12,310
  • 6% on income from $12,311 to $15,400
  • 7% on income over $15,401

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• South Carolina Earned Income Tax Credit (SC EITC): Available to eligible low-income individuals.
• Two Wage Earner Credit: Available to married couples who both have income.

Special Considerations:

• South Carolina’s top marginal rate is relatively high for lower income brackets, impacting self-employed individuals with modest incomes.
• Local business taxes may apply depending on the city or county.

South Dakota State Income Tax

State Income Tax Rate:

• South Dakota does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in South Dakota are responsible for federal self-employment taxes.
• No additional state self-employment tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• South Dakota’s lack of income tax is advantageous for self-employed individuals, allowing them to keep more of their earnings.
• Federal tax obligations and estimated payments must still be met.

Tennessee State Income Tax

State Income Tax Rate:

• Tennessee does not have a general state income tax. However, it imposes the Hall income tax on certain interest and dividend income at a rate of 1% (phased out by 2021).

Self-Employment Tax Obligations:

• Self-employed individuals in Tennessee are responsible for federal self-employment taxes but do not have to pay state income tax on earned income.
• No additional state self-employment tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Tennessee has a favorable tax environment for self-employed individuals due to the lack of state income tax.
• Self-employed individuals should ensure compliance with federal tax obligations.

Utah State Income Tax

State Income Tax Rate:

• Utah has a flat state income tax rate of 4.85% on all taxable income, including for self-employed individuals.

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $1,000.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Utah Earned Income Tax Credit (UT EITC): Available to eligible low-income individuals.
• Tax Credit for Renewable Energy Systems: Available for individuals investing in renewable energy.

Special Considerations:

• Utah’s flat tax rate simplifies calculations but may not be advantageous for lower-income self-employed individuals compared to progressive tax systems.
• Local business taxes may apply depending on the city or county.

Vermont State Income Tax

State Income Tax Rate:

• Vermont has a progressive income tax system with the following rates:some text
  • 3.35% on income up to $42,150
  • 6.6% on income from $42,151 to $102,050
  • 7.6% on income from $102,051 to $213,150
  • 8.75% on income over $213,151

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Vermont Earned Income Tax Credit (VT EITC): Available to eligible low-income individuals.
• Child and Dependent Care Credit: Available for individuals with qualifying dependents.

Special Considerations:

• Vermont’s high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

Virginia State Income Tax

State Income Tax Rate:

• Virginia has a progressive income tax system with the following rates:some text
  • 2% on income up to $3,000
  • 3% on income from $3,001 to $5,000
  • 5% on income from $5,001 to $17,000
  • 5.75% on income over $17,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $150.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• Virginia Earned Income Tax Credit (VA EITC): Available to eligible low-income individuals.
• Virginia Education Improvement Scholarship Credit: Available for contributions to qualifying scholarship foundations.

Special Considerations:

• Virginia’s relatively high top marginal rate impacts higher-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

West Virginia State Income Tax

State Income Tax Rate:

• West Virginia has a progressive income tax system with the following rates:some text
  • 3% on income up to $10,000
  • 4% on income from $10,001 to $25,000
  • 4.5% on income from $25,001 to $40,000
  • 6% on income from $40,001 to $60,000
  • 6.5% on income over $60,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $400.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• West Virginia Earned Income Tax Credit (WV EITC): Available to eligible low-income individuals.
• Homestead Exemption: Available to low-income seniors and disabled residents.

Special Considerations:

• West Virginia’s relatively high top marginal rate can impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

Wisconsin State Income Tax

State Income Tax Rate:

• Wisconsin has a progressive income tax system with the following rates:some text
  • 3.54% on income up to $12,760
  • 4.65% on income from $12,761 to $25,520
  • 6.27% on income from $25,521 to $280,950
  • 7.65% on income over $280,951

Self-Employment Tax Obligations:

• Self-employed individuals must pay both state income tax and federal self-employment tax.
• Quarterly estimated tax payments are required if expected annual state tax liability is over $500.

Deductions and Credits:

• Health Insurance Deduction: Self-employed individuals can deduct health insurance premiums for themselves and their families.
• Homestead Credit: Available to low-income homeowners and renters.
• Earned Income Tax Credit: Available to eligible low-income individuals.

Special Considerations:

• Wisconsin’s high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the city or county.

Wyoming State Income Tax

State Income Tax Rate:

• Wyoming does not have a state income tax, so self-employed individuals do not pay state income tax on their earnings.

Self-Employment Tax Obligations:

• Self-employed individuals in Wyoming are responsible for federal self-employment taxes.
• No additional state self-employment tax.

Deductions and Credits:

• Since there is no state income tax, there are no state-specific deductions or credits for self-employed individuals.

Special Considerations:

• Wyoming’s lack of income tax is advantageous for self-employed individuals, allowing them to keep more of their earnings.
• Federal tax obligations and estimated payments must still be met.

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Washington D.C. State Income Tax Rate

State Income Tax Rate:

• Washington D.C. has a progressive income tax system with the following rates:some text
  • 4% on income up to $10,000
  • 6% on income from $10,001 to $40,000
  • 6.5% on income from $40,001 to $60,000
  • 8.5% on income from $60,001 to $350,000
  • 8.75% on income from $350,001 to $1,000,000
  • 10.75% on income over $1,000,001

Self-Employment Tax Obligations:

• Self-employed individuals must pay both D.C. income tax and federal self-employment tax.
• Estimated tax payments are required if expected annual state tax liability is over $100.

Deductions and Credits:

• Health Insurance Deduction: Can deduct health insurance premiums for themselves and their families.
• D.C. Earned Income Tax Credit (DC EITC): Available to eligible low-income individuals.
• Child and Dependent Care Credit: Available for individuals with qualifying dependents.

Special Considerations:

• D.C.’s relatively high top marginal rate can significantly impact high-income self-employed individuals.
• Local business taxes may apply depending on the specific type of business activity.

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Additional Considerations for Self-Employed Individuals Across All States

Regardless of the state, self-employed individuals must manage both federal and state tax obligations effectively. Here are some overarching strategies and tips:

1. Track Income and Expenses Meticulously:

Use tools like Everlance to track mileage, business expenses, and income accurately. Proper record-keeping can maximize deductions and minimize tax liability.

2. Pay Estimated Taxes Quarterly:

Self-employed individuals must pay federal and, in many cases, state estimated taxes quarterly to avoid penalties. Use IRS Form 1040-ES and state-specific forms for estimated payments.

3. Maximize Deductions and Credits:

Deductible expenses can include health insurance premiums, home office costs, retirement plan contributions, and more. Familiarize yourself with both federal and state-specific deductions and credits.

4. Stay Informed on Tax Law Changes:

Tax laws can change frequently. Staying up-to-date with changes, especially those affecting self-employment and business deductions, is crucial for effective tax planning.

5. Consult a Tax Professional:

Navigating self-employment taxes can be complex. Working with a tax professional or using tax software specifically designed for self-employed individuals can help ensure compliance and optimize tax outcomes.

This comprehensive state-by-state guide should serve as a valuable resource for understanding the self-employment tax obligations and opportunities in each state. For further assistance with tracking your expenses and maximizing your deductions, Everlance provides a range of tools designed specifically for self-employed individuals.

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