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8 States with the Highest Income Tax Rates

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If you’re looking to lower your tax bill in retirement, you’ll probably want to think hard before retiring to one of these eight states. California, Hawaii, Iowa, Minnesota, New Jersey, New York, Oregon and Vermont have the nation’s highest top state income tax rates. Income taxes also run high in Washington, D.C. California has the highest income tax rate at 13.3%.

Keep in mind, though, that some of these states exclude some retirement income, which softens the blow. New York, for example, has a top income tax rate of 8.82% but excludes public pensions and up to $20,000 of other types of retirement income. Oregon, on the other hand, taxes most retirement income at its top tax rate of 9.9%.

SEE ALSO: 13 States That Tax Social Security


Kiplinger's state-by-state guide to taxes on retirees is updated annually based on information from state tax departments, Wolters Kluwer Tax & Accounting and the Tax Foundation. All data are for the 2017 tax year unless otherwise noted.


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