Which states have no income tax?

Nine states have no state income tax on wages: Alaska (AK), Florida (FL), Nevada (NV), New Hampshire (NH — fully tax-free on wages as of 2025), South Dakota (SD), Tennessee (TN), Texas (TX), Washington (WA), and Wyoming (WY). New Hampshire previously taxed interest and dividends but fully repealed that tax effective January 1, 2025.

Which states have Paid Family and Medical Leave (PFML) programs in 2026?

As of 2026, the following states and territories have enacted PFML programs: California, Colorado, Connecticut, Delaware (contributions begin 2026), District of Columbia, Hawaii, Maine (contributions begin May 2026), Massachusetts, Minnesota (contributions begin 2026), New Jersey, New York, Oregon, Rhode Island, and Washington. Maryland begins contributions in 2027, and Virginia in 2028. PFML is a major tax code, meaning each program has its own form and reporting requirements.

Which states require State Disability Insurance (SDI)?

Five states and one territory require mandatory temporary disability insurance: California (SDI), Hawaii (TDI), New Jersey (TDI), New York (DBL), Rhode Island (TDI), and Puerto Rico. Notably, Hawaii and New York administer their programs through private insurance carriers rather than a government fund.

What states have local or municipal income taxes?

Approximately 17 states authorize local income or payroll taxes. The heaviest local tax burdens are in Pennsylvania (approximately 2,500 taxing jurisdictions with Local Services Tax and Earned Income Tax), Ohio (600+ municipalities), Maryland (all counties plus Baltimore City), and Indiana (all 92 counties levy county income taxes). New York City, Detroit, and other major cities also levy significant local income taxes.

What is a reciprocity agreement between states?

A reciprocity agreement allows employees who live in one state and work in another to pay income tax only to their state of residence. This simplifies withholding for employers and avoids double taxation for employees. Common examples include the PA-NJ, DC-MD-VA, and IL-IA-KY-MI-WI clusters. Reciprocity applies only to state income tax withholding — it does not affect SUI, local taxes, or PFML obligations.

What is the difference between a major and minor tax code?

In employment tax terminology, a major tax code is one that is reported on its own dedicated form (such as PFML, which has its own state filing form). A minor tax code reports under a parent major tax's form — it does not have its own standalone reporting form. For example, PFML is a major tax code because each state's program requires its own filing. This hierarchical parent-child relationship is important for payroll system configuration and compliance.

Do Hawaii and New York PFML programs pay into a government fund?

No. Both Hawaii and New York PFML/TDI programs are administered through private insurance carriers, not government funds. Employers must obtain coverage through a private carrier or qualify for self-insurance. This is a critical distinction for payroll compliance because the contribution remittance, reporting, and carrier management processes differ significantly from government-administered programs like those in California, Massachusetts, or Washington.

State Tax Comparison

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State Employment Tax Comparison Tool

Compare SIT, SUI, PFML, SDI, local taxes, reciprocity, and more across all 50 states + DC

2026 Tax Year

✓ 9 states have no income tax

⚠ 15 states/DC have PFML programs

★ 5 states require SDI/TDI

⌂ 16 states have local income taxes

⇄ 19 states have reciprocity agreements

▮ 16 states use a flat tax rate

State A

State B

State C

Compiling tax data…

Lower cost / favorable

Moderate / notable

Higher cost / burden

N/A or similar

$ State Income Tax (SIT)

⚙ State Unemployment Insurance (SUI)

🏢 Local / Municipal Taxes

👥 Paid Family & Medical Leave (PFML)

PFML is a major tax code — each state program has its own form and reporting requirements.

⚛ State Disability Insurance (SDI / TDI)

⇄ Reciprocity Agreements

☰ Additional Comparisons

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Data reflects 2026 tax year information. Rates and thresholds are subject to change. This tool is for informational purposes only and does not constitute tax advice. Always verify with official state agency publications before making compliance decisions. © 2026 ReVerify Consulting.