Tennessee Income Tax 2026

Tennessee does not levy a state income tax on wages in 2026. Your paycheck is reduced only by federal income tax, Social Security and Medicare - so you keep more than in most states. Tennessee imposes NO individual income tax on wages, salaries, or any earned income for tax year 2026. The Hall Income Tax, which formerly taxed only interest and dividend income (never wages), was phased down and fully repealed effective January 1, 2021; tax year 2021 onward has zero individual income tax. There are no state standard deductions or personal exemptions because there is no income tax to apply them against. No local or city income taxes exist in Tennessee. Social Security, pensions, retirement distributions, and investment income are all untaxed at the state level. Tennessee's state revenue relies primarily on a 7.00% state sales tax (plus local). (Note: Tennessee does levy a business franchise and excise tax on certain entities, but that is not an individual income tax on wages.)