{"id":30479,"date":"2017-11-28T08:00:43","date_gmt":"2017-11-28T14:00:43","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=30479"},"modified":"2021-07-15T10:09:57","modified_gmt":"2021-07-15T15:09:57","slug":"states-have-changed-their-tax-rates-this-year-hr-block","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/irs\/states-have-changed-their-tax-rates-this-year-hr-block\/","title":{"rendered":"States Have Changed Their Tax Rates This Year"},"content":{"rendered":"<p>While there has been plenty of coverage in the recent months about possible changes to the federal tax laws and rates, many states have enacted changes to their own tax laws and rates. Because these changes normally miss the national news, you likely have missed out on the updates unless they happened in your state.<\/p>\n<p>If you earn wages in other states or run a business in a state other than your place of residence, you could be affected.<\/p>\n<p>This blog will focus mainly on state tax rates for the 2017\u00a0tax year, but will also mention a handful that will come into effect in the next few years as well.<\/p>\n<h2>Illinois<\/h2>\n<p>Effective as of July 1, 2017, there are new individual and business rates in effect for Illinois state tax:<\/p>\n<ul>\n<li>The income tax rate for all individuals\u00a0 , estates, and trusts has increased from 3.75% to 4.95%<\/li>\n<li>\u00a0The income tax rate for corporations (including S corps) has increased from 5.25% to 7%<\/li>\n<\/ul>\n<p>Since these changes took effect mid-year, there could be some associated complications. If you are a calendar year filer with no estimated payments, all the changes should be handled on your 2017 return. The changes will be accounted for in the instructions when completing your return. If you are a fiscal year filer, you should consult this\u00a0<a href=\"http:\/\/tax.illinois.gov\/Publications\/Bulletins\/2018\/FY-2018-02.pdf\">info sheet<\/a>\u00a0from IL, which will help with your filing for this year. Lastly, if you are required to make estimated payments, any estimates made after July 1, 2017 should account for the increase in rates.<\/p>\n<h2>Indiana<\/h2>\n<p>Effective January 1, 2017, the Indiana individual income tax rate is reduced from 3.3% to 3.23%.<\/p>\n<h2>Kansas<\/h2>\n<p>The Sunflower State enacted a new law on June 27, 2017, but will be retroactive to January 1, 2017. The new law creates new brackets and rates for individuals and eliminates tax breaks for individuals with income from pass-through entities. Your employer should have implemented changes in your withholding, beginning in July, to account for the retroactive change.<\/p>\n<p>The new brackets and rates are as follows:<\/p>\n<table border=\"1\" width=\"500\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"38\">Rate<\/td>\n<td valign=\"top\" width=\"114\">Single Filers<\/td>\n<td valign=\"top\" width=\"114\">MFJ Filers<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"38\">2.9%<\/td>\n<td valign=\"top\" width=\"114\">Income up to $15,000<\/td>\n<td valign=\"top\" width=\"114\">Income up to $30,000<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"38\">4.9%<\/td>\n<td valign=\"top\" width=\"114\">$15,001 to $30,000<\/td>\n<td valign=\"top\" width=\"114\">$30,001 to $60,000<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"38\">5.2%<\/td>\n<td valign=\"top\" width=\"114\">Income over $30,000<\/td>\n<td valign=\"top\" width=\"114\">Income over $60,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>In 2012, Kansas passed a law that would eliminate any tax on income from a pass-through entity, such as a partnership, LLC, or S-Corporation to an individual. Thus, taxpayers were not paying any tax on income earned by their pass-through entities.<\/p>\n<p>In 2017, this exemption has been eliminated. Going forward, taxpayers will pay tax on their income from pass-through entities using the applicable rates described above.<\/p>\n<h2>Tennessee<\/h2>\n<p>Beginning January 1, 2017, the Tennessee income tax rate will be reduced by 1% annually.\u00a0 The rate for 2017 subsequently reduced from 5% to 4%. This makes it one of the <a href=\"https:\/\/www.hrblock.com\/tax-center\/irs\/tax-brackets-and-rates\/highest-lowest-taxed-states\/\">states with the lowest taxes<\/a>.<\/p>\n<h2>Ohio<\/h2>\n<p>Effective as of January 1, 2017, Ohio has eliminated their two lowest tax brackets of .5% and .99% for income under $10,500. The new rates and brackets are as follows:<\/p>\n<table border=\"1\" width=\"434\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"49\">Rate<\/td>\n<td valign=\"top\" width=\"108\">Income Bracket<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">1.980%<\/td>\n<td valign=\"top\" width=\"108\">$10,500 &#8211; $15,800<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">2.476%<\/td>\n<td valign=\"top\" width=\"108\">$15,801 &#8211; $21,100<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">2.969%<\/td>\n<td valign=\"top\" width=\"108\">$21,101 &#8211; $42,100<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">3.465%<\/td>\n<td valign=\"top\" width=\"108\">$42,101 &#8211; $84,200<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">3.960%<\/td>\n<td valign=\"top\" width=\"108\">$84,201 &#8211; $105,300<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">4.597%<\/td>\n<td valign=\"top\" width=\"108\">$105,301 &#8211; $210,600<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"49\">4.997%<\/td>\n<td valign=\"top\" width=\"108\">$210,601 and over<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><\/h2>\n<h2>2018 And Beyond: Taxes By State<\/h2>\n<p><strong>Delaware:<\/strong> the estate tax will be eliminated beginning in 2018<\/p>\n<p><strong>Hawaii:<\/strong> three top marginal tax rates will be added beginning in 2018:<\/p>\n<ul>\n<li>for individuals and MFS taxpayers (not surviving spouses or HoH) 9% for income over $150k, 10% for income over $175k, and 11% for income over $200,000;<\/li>\n<li>for MFJ and surviving spouse 9% for income over $300,000, 10% for income over $350,000 and 11% for income over $400,000;<\/li>\n<li>and HoH 9% for income over $225,000, 10% for income over 262,500, and 11% for income over $300,000.<\/li>\n<\/ul>\n<p><strong>Kansas:<\/strong> the rates outlined above will increase to 3.1%, 5.25%, and 5.7% respectively.<\/p>\n<p><strong>New York:<\/strong>\u00a0in 2018 the rate for taxpayers is reduced from 6.45% to 6.33% for the $21,400 to $80,650 tax bracket (MFS and Single rates are used for illustration) and from 6.65% to 6.57% for the $80,650 to $215,400 tax bracket.<\/p>\n<ul>\n<li>In 2019, for the same tax brackets, the rate is reduced to 6.21% and 6.49%.<\/li>\n<li>In 2020, for the same tax brackets, the rate is reduced to 6.09% and 6.41%.<\/li>\n<li>In 2021, for the same tax brackets, the rate is reduced to 5.97% and 6.33%.<\/li>\n<li>In 2022, for the same tax brackets, the rate is reduced to 5.85% and 6.25%.<\/li>\n<li>In 2023, for the same tax brackets, the rate is reduced to 5.73% and 6.17%.<\/li>\n<li>In 2024, for the same tax brackets, the rate is reduced to to 5.61% and 6.09%.<\/li>\n<\/ul>\n<p>For 2025 and beyond, these tax brackets will have a tax rate of 5.50% and 6.00% respectively.<\/p>\n<p><strong>New Hampshire:<\/strong> Business\u00a0tax rates will be reduced for the BPT and BET beginning in 2019. The rates will reduce to 7.9% for the BPT and .675% for the BET for 2019. In 2020, they will reduce farther to 7.7% and .6%, respectively. They are scheduled to dip again in 2022 to 7.5% and .5%.<\/p>\n<p><strong>North Carolina:<\/strong> Effective January 1, 2019, the individual income tax rate will reduce from 5.499% to 5.25%.<\/p>\n<p><strong>Tennessee:<\/strong>\u00a0Effective January 1, 2018 the individual income tax rate will be reduced from 4% to 3%.\u00a0 Effective January 1, 2019 the individual income tax rate will be reduced from 3% to 2%.\u00a0 Effective January 1, 2020 the individual income tax rate will be reduced from 2% to 1%.<\/p>\n<p>Full repeal of the Tennessee individual income tax will happen starting January 1, 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While there has been plenty of coverage in the recent months about possible changes to the federal tax laws and rates, many states have enacted changes to their own tax laws and rates. Because these changes normally miss the national news, you likely have missed out on the updates unless they happened in your state. [&hellip;]<\/p>\n","protected":false},"author":418,"featured_media":30480,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25,56,4784],"tags":[],"class_list":["post-30479","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-irs","category-tax-brackets-and-rates","category-tax-tips"],"acf":[],"yoast_head":"<title>States Have Changed Their Tax Rates This Year | H&amp;R Block<\/title>\n<meta name=\"description\" content=\"Federal and state tax rates are constantly in a state of change. 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