About Mississippi State Income Tax

Mississippi uses a progressive tax system with three tax brackets. Mississippi is known for having relatively competitive state income tax rates, making it attractive to residents seeking lower tax burdens compared to other states.

Mississippi Tax Brackets 2026

• $0 - $5,000: 4%
• $5,001 - $10,000: 4.5%
• Over $10,000: 5%

How Mississippi Tax is Calculated

Mississippi's progressive tax system works as follows:

1. Income is divided into three tax brackets
2. Each bracket is taxed at its corresponding rate
3. Most taxpayers reach the top 5% rate
4. Standard deduction reduces taxable income

Mississippi Tax Features

• Low Top Rate: 5% is competitive with neighboring states
• Affordable State: Low taxes combined with low cost of living
• Retirement Friendly: Military retirement income is exempt from state tax
• Social Security: Not taxed by Mississippi state

Frequently Asked Questions

What is Mississippi's income tax rate?

Mississippi has progressive tax rates from 4% to 5%. The top rate of 5% applies to income over $10,000, so most Mississippi taxpayers pay this rate on a significant portion of their income.

Does Mississippi tax retirement income?

Mississippi offers favorable treatment for retirement income. Military retirement pay is completely exempt from state tax, and qualified pension income may receive preferential treatment under certain conditions.

Does Mississippi tax Social Security?

No, Mississippi does not tax Social Security retirement benefits, making it relatively retirement-friendly for seniors receiving these benefits.

How does Mississippi compare to neighboring states?

Mississippi (5%) is competitive: Louisiana (4.25%), Arkansas (4.9%), Tennessee (0%), and Alabama (5%). Mississippi offers a middle ground with reasonable tax rates and affordable living costs.

Mississippi vs. Neighboring States

Tax comparison with surrounding states:

• Tennessee: No state income tax
• Louisiana: Progressive up to 4.25%
• Arkansas: Progressive up to 4.9%
• Alabama: Progressive up to 5%

Tips for Mississippi Taxpayers

• Take advantage of Mississippi's moderate 5% top tax rate
• Military retirees should claim full exemption on retirement income
• Social Security benefits are not taxed in Mississippi
• Combine state tax savings with Mississippi's low cost of living
• Consider Mississippi for relocation if you want affordable taxes and living expenses