Tennessee has no state income tax. Your only income tax obligations are federal brackets. Calculate your exact marginal and effective federal tax rate below. Formula shown, sources cited — no account required.
Tennessee levies no income tax on wages, salaries, or investment income — the Hall income tax on dividends and interest was fully repealed as of 2022. That means residents face only federal income tax brackets and payroll taxes, with no state return to file. For a median-income household earning $71,997, the effective federal rate typically lands around 12–14%, leaving Tennessee workers with a lighter combined tax burden than most of the South. The revenue gap is filled by Tennessee's sales tax, which combines state and average local rates to reach 9.61% — the highest in the nation. That shifts the tax burden from income to consumption, which hits lower-income households proportionally harder. High earners and investors benefit most from the zero-income-tax structure, since capital gains and passive income face no state levy. Use a federal tax bracket calculator to map your marginal rate and identify the most valuable deductions and retirement contributions to prioritize each year.
Tennessee Tax Brackets Explained: No State Tax, Federal Only
Tennessee is one of the nine US states with no state income tax. Residents only pay federal income tax and FICA payroll taxes. This makes Tennessee attractive for high earners — a $200,000 income that would face 9–10% state tax in California or New York faces zero additional state burden here.
The median household in Tennessee earns $71,997/year. At that income (single filer), the federal effective rate is approximately 12–14%, bringing total income tax (federal + state) to roughly 12–14%.
How Marginal vs. Effective Rate Works
The marginal rate is the rate on your last dollar of income — it does not apply to all income. The effective rate is your total tax divided by total income. For example, someone earning $100,000 in Tennessee has a 22% federal marginal rate but an effective federal rate of roughly 15%, because the first $44,725 (2024) is taxed at 10% and 12%, not 22%.