On November 1st, New Jersey residents will start paying considerably higher gas taxes, with the rate rising from 14.5 to 37.5 cents per gallon (cpg) as part of a broader tax deal negotiated between Governor Chris...
- How High are Personal Dividends Income Tax Rates in Your ...
How High are Personal Dividends Income Tax Rates in Your State?
Currently, the United States has one of the highest tax burdens on personal dividend income in the OECD. The top federal rate on personal dividend income is 23.8 percent (20 percent top marginal tax rate plus a 3.8 percent net investment tax to fund the Affordable Care Act). In addition, taxpayer face personal dividend taxation at the state level that ranges from zero in states with no personal income tax to 13.3 percent in California.
Taking into account the deductibility of your state taxes against your federal taxes, local income taxes, the phase-out of itemized deductions, and any special treatment of personal dividend income, this map shows the combined federal, state, and local top marginal tax rate on personal dividend income in each state.
(Click on the map to enlarge it. All maps and other graphics may be published and reposted with credit to the Tax Foundation.)
Most states tax personal dividend income as ordinary income. Thus, states with high income tax rates have the highest taxes on personal dividends.
Californians face the highest top marginal personal dividend tax rate in the United States of 33 percent, followed by taxpayers in New York (31.5 percent), and Hawaii (31.6 percent).
Taxpayers in states with no personal income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) face a top marginal tax rate on personal dividend income of 25 percent.
Two states that do no tax personal income levy a tax on dividend income. Tennessee’s Hall Tax levies a 6 percent tax on personal dividend income (More on that tax here). New Hampshire levies a 5 percent tax on personal dividend income.
The average across the United States is 28.6 percent.
Get Email Updates from the Tax Foundation
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.