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16 States with Income Tax Cuts in 2024

Ali Hassan
9 min read

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In this article, we will look at 16 states with income tax cuts in 2024. If you want to skip our detailed analysis, head straight to 5 States with Income Tax Cuts in 2024.

2024 Tax Brackets

The US has experienced a series of significant tax reforms over the past several years, with tax cuts being a prominent development. Most of the states understand the significance of maintaining a stable, pro-growth, and competitive tax code, especially after the COVID-19 pandemic. There are some states with no sales tax or income tax and with more states reducing their income tax in 2024, US residents should be pleased. According to the Tax Foundation, thirty-four states are going through notable tax changes in 2024. The tax changes took effect on January 1, 2024. Generally, state tax changes take effect either at the start of the calendar year or the fiscal year, which begins on July 1. However, the rate changes for major taxes are usually implemented effective January 1. 

The Internal Revenue Service (IRS) has made changes to more than 60 tax provisions for tax year 2024. The tax year 2024 changes will apply to income tax returns filed in 2025. The top tax remains unchanged at 37% from 2023 for individual single taxpayers with incomes greater than $609,350 and $731,200 for married couples filing jointly. The other rates are 35%, 32%, 24%, 22%, and 12% for individual single taxpayers with incomes over $243,725, $191,950, $100,525, $47,150, and $11,600, respectively. The minimum income tax rate for a single person is 10% with an income bracket of $11,600 or less. The IRS has increased the standard deduction for married couples filing jointly to $29,200 for 2024, up by $1,500 from tax year 2023. For individual taxpayers and married individuals filing separately, the IRS has increased the standard deduction to $14,600 for 2024, a rise of $750 from 2023. While, the standard deduction will be $21,900 for heads of households during the tax year 2024, increasing by $1,100 from the amount charged in tax year 2023. One of the main things that remains unchanged for the tax year 2024 is personal exemption, which remains at zero.

The main source of revenue for the US government is individual income taxes followed by corporate income taxes. As of November 30, 2023, the US government had gathered a revenue of almost $678 billion for the fiscal year 2024, as per the US Treasury. Out of the total government revenue, 51% came from individual income taxes, while Social Security and Medicare taxes accounted for another 35% of the revenue. The combined contribution of individual and corporate income taxes is $403 billion, accounting for 59% of total revenue. Since 2015, the US revenue-to-GDP has declined from 18% to 16% in 2023. In fiscal year 2023, the federal government collected a total revenue of $4.44 trillion compared to the government's spending of $6.13 trillion. 

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