State Tax Estimator Agent Skill

State Income Tax Estimator

Overview

Estimates state income tax based on your total income and state of residence. State income tax rates vary dramatically, from 0% in states like Texas and Florida to 13.3% in California. This skill helps you approximate your state tax bill for planning and quarterly payment purposes.

Wilson Tools Used

• spending_summary — Pull total income (wages, self-employment, investment) for the tax year
• transaction_search — Find state tax payments already made (withholding or estimated payments)
• export_transactions — Export income and payment data for state return preparation

Workflow

• Ask the user for their state of residence (and work state, if different).
• Use spending_summary to determine total gross income for the tax year.
• Apply standard deductions or known adjustments for the state.
• Look up the state's tax brackets and calculate the estimated tax.
• Use transaction_search to find state tax payments already made (look for state tax authority names, "state withholding," or similar).
• Calculate the remaining balance or overpayment.

States With No Income Tax

These states impose no state income tax on earned income:

Alaska, Florida, Nevada, New Hampshire (interest/dividends only, fully repealed as of 2025), South Dakota, Tennessee, Texas, Washington, Wyoming.

Note: Washington imposes a 7% capital gains tax on gains exceeding $270,000. New Hampshire historically taxed interest and dividends but phased this out entirely by 2025.

Representative State Tax Rates (2025, approximate)

| State | Top Marginal Rate | Structure | Notes |

|-------|-------------------|-----------|-------|

| California | 13.3% | Progressive (10 brackets) | Highest in the nation; 1% mental health surcharge above $1M |

| New York | 10.9% | Progressive (9 brackets) | NYC adds 3.078-3.876% |

| New Jersey | 10.75% | Progressive | Kicks in above $1M |

| Oregon | 9.9% | Progressive (4 brackets) | No sales tax offsets higher income tax |

| Minnesota | 9.85% | Progressive (4 brackets) | |

| Massachusetts | 5% flat + 4% surtax | Flat + surtax | 4% surtax on income above $1M (effective 2023) |

| Illinois | 4.95% | Flat rate | |

| Colorado | 4.4% | Flat rate | Reduced from 4.55% in 2024 |

| Arizona | 2.5% | Flat rate | Reduced to flat rate in 2023 |

| North Carolina | 4.5% | Flat rate | Phasing down to 3.99% by 2026 |

| Pennsylvania | 3.07% | Flat rate | One of the lowest flat rates |

Multi-State Considerations

• If you live in one state and work in another, you generally owe tax to both but receive a credit from your home state for taxes paid to the work state.
• Remote workers: tax obligations depend on both where the work is performed and employer location. Some states have "convenience of the employer" rules (notably New York).
• If you moved mid-year, you may need to file part-year returns in both states.

Without Wilson

• Determine your total gross income from all sources.
• Look up your state's standard deduction (or itemize if your state allows it).
• Subtract the deduction from gross income to get taxable income.
• Find your state's current tax brackets at your state Department of Revenue website.
• Apply the brackets progressively:
• Example for a progressive state: first $10,000 at 2%, next $30,000 at 4%, remainder at 6%.
• For flat-rate states: multiply taxable income by the rate.
• Subtract any state tax credits you qualify for.
• Subtract withholding and estimated payments already made.
• The result is your estimated balance due (or refund).

Important Notes

• State tax brackets, rates, and deductions change frequently. Always verify current rates at your state's Department of Revenue website before filing.
• Some states conform to federal taxable income as a starting point; others calculate state income independently. Deductions allowed federally may not be allowed by your state.
• Local income taxes (city, county) exist in some states (Ohio cities, NYC, Portland, etc.) and are separate from state taxes.
• State estimated tax payments follow similar quarterly schedules to federal but deadlines may differ.
• If you have income in multiple states, consult a tax professional to avoid double taxation and ensure proper credit allocation.
• This is not tax advice. Consult a CPA or tax professional for filing decisions.