Tennessee Tax Rate
Editor’s Note: Income tax rates vary from state to state, depending upon marital status and income. But Tennessee is not one of them. If you’re wondering “Does Tennessee have state income tax?” the answer is “yes”. But it’s a bit different than other states. Learn more about the Tennessee tax rate here.
While 32 states, plus the District of Columbia, have an income tax structure that mimics the federal government’s progressive tax system, Tennessee is not one of them.
Tennessee used to have a flat tax rate. But according to the Tennessee Department of Revenue, the state income tax is being eliminated, and the applicable tax rate for each year of the phase out is as follows:
- 4% of taxable income for tax years beginning January 1, 2017
- 3% of taxable income for tax years beginning January 1, 2018
- 2% of taxable income for tax years beginning January 1, 2019
- 1% of taxable income for tax years beginning January 1, 2020
(Repeal starts January 1, 2021)
There is a flat tax that applies to income earned from interest and dividends, however. In 2019, the tax was 2%. In addition, the state’s cities don’t tax income on a local level.
So, Are There Tennessee Tax Brackets?
Income earned in Tennessee is taxed in brackets at the same rate, thus there are not tax brackets to report. The only Tennessee tax bracket is 1% in tax year 2020.
More Help With Taxes in Tennessee
Understanding your tax obligation can be confusing. Beyond this, you’ll need to decide if you will itemize your deductions to claim state or local property taxes.
To determine if you should itemize your deductions, add up your calendar-year deductible expenses, including your state income tax expense, to see if the total is greater than the standard deduction amount for your filing status. If you are single you can claim a standard deduction of $12,400. So, if you pay more than $12,200 in state income taxes and other itemized deductions, then consider itemizing your taxes.
So, use Tax Pro Go, virtual tax prep offered by H&R Block. With this service, we’ll match you with a tax pro with Tennessee tax expertise. Then, you will upload your tax documents, and our tax pros will do the rest! We can even help with not only Tennessee taxes, including federal deductions for paying state taxes.
Taking in these Tennessee tax considerations, our tax pros will make sure you get every tax credit and deduction you deserve.
Looking for more general support? Check out our online tax filing options.
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