Nine States Implement Income Tax Cuts on New Year’s Day

Tax reforms across the U.S. include reductions in income tax rates, with Louisiana and Iowa transitioning to flat tax systems.

Nine states, including Indiana, Iowa, Louisiana, and North Carolina, have reduced individual income tax rates starting January 1, 2025.
Louisiana and Iowa have shifted from progressive tax systems to flat income tax rates of 3% and 3.8%, respectively.
North Carolina's income tax rate drops to 4.25% and is set to decrease further to 3.99% in 2026, while South Carolina plans phased reductions to its top marginal rate.
New Hampshire completes its phaseout of the Interest & Dividends Tax, becoming the eighth U.S. state with no personal income tax.
These tax cuts are part of a broader trend of states adopting lower and flatter tax structures to attract residents and businesses.