Beginning Jan. 1, nine states across the nation cut income taxes for residents, according to a Jan. 1 report from CBS News.
These nine states will be cutting taxes in 2025, according to an analysis from the Tax Foundation:
Indiana plans to reduce its income tax rate to 3% in 2025, down from 3.05% in 2024. The reduction will result in an estimated tax cut of $33 for a worker earning $65,000 a year.
Iowa is cutting its individual income tax rate to a flat rate of 3.8%, down from a top tax rate of 5.7% in 2024.
Louisiana is cutting its individual income tax rate to a flat rate of 3%, down from a graduated tax with a top rate of 4.25% in 2024. Taxpayers who earn between $30,000 to $40,000 a year, the largest number of taxpayers in any bracket in the state, will see their state taxes reduced by 50%, to $338 a year.
Mississippi will reduce its individual income tax rate to 4.4%, down from 4.7% in 2024.
Missouri will cut its state income tax to 4.7% from 4.8% in 2024.
Nebraska will cut taxes to 5.2%, down from 5.84% in 2024.
New Mexico will now have six brackets, versus five in 2024, with rates ranging from 1.5% to 5.9%. Some tax rates will remain the same, but others will change. For instance, the lowest bracket was 1.7% in 2024. The state's governor believes that a married couple filing jointly will save about $303 a year under the new tax brackets.
North Carolina will cut its tax rate to 4.5%, down from 4.75% in 2024. The state's individual tax rate will once again drop in 2026, to 3.99%.
West Virginia's top tax rate will be reduced from 5.12% in 2024 to 4.82%.