About Oklahoma State Income Tax

Oklahoma uses a progressive tax system with five tax brackets. The state is known for its extremely low starting tax rate of just 0.25%, making it attractive for low-income earners. Combined with a reasonable top rate of 4.75%, Oklahoma offers competitive taxation for all income levels.

Oklahoma Tax Brackets 2026

• $0 - $1,000: 0.25%
• $1,001 - $2,500: 0.75%
• $2,501 - $3,750: 1.75%
• $3,751 - $9,200: 2.75%
• Over $9,200: 4.75%

How Oklahoma Tax is Calculated

Oklahoma's progressive tax system works as follows:

1. Income is divided into five tax brackets
2. Each bracket is taxed at its corresponding rate
3. Income over $9,200 is taxed at the highest rate of 4.75%
4. Standard deduction and personal exemptions reduce taxable income

Oklahoma Tax Features

• Lowest Starting Rate: 0.25% is one of the most competitive initial tax rates in the nation
• Reasonable Top Rate: 4.75% is lower than many neighboring states
• Broad Tax Base: Oklahoma's progressive system spreads the tax burden fairly
• Retirement Friendly: Favorable treatment of retirement and pension income
• Affordable Living: Low taxes combined with low cost of living

Frequently Asked Questions

What is Oklahoma's income tax rate?

Oklahoma has progressive tax rates from 0.25% to 4.75%. The unique 0.25% starting rate is among the lowest in America, making Oklahoma competitive for low-income earners.

Does Oklahoma have sales tax?

Yes, Oklahoma has a 4.5% state sales tax, with some municipalities adding local sales taxes. However, groceries and prescription medications are exempt from sales tax.

Does Oklahoma tax retirement income?

Oklahoma offers favorable treatment of retirement income, including pensions and retirement account distributions. Taxpayers can exclude up to $10,000 of retirement benefits from taxation if they meet certain age requirements.

Does Oklahoma tax Social Security?

No, Oklahoma does not tax Social Security retirement benefits, making it attractive for retirees seeking to preserve their income.

How does Oklahoma compare to neighboring states?

Oklahoma (4.75%) is competitive among southwestern states: Texas (0% income tax), New Mexico (5.9%), Arkansas (4.9%), Missouri (4.95%), Colorado (5.55%), and Kansas (5.7%). Oklahoma's 4.75% top rate is among the lowest.

Oklahoma vs. Neighboring States

Tax comparison with surrounding states:

• Texas: No state income tax
• Oklahoma: Progressive up to 4.75%
• Arkansas: Progressive up to 4.9%
• Missouri: Progressive up to 4.95%
• Kansas: Progressive up to 5.7%
• Colorado: Progressive up to 5.55%
• New Mexico: Progressive up to 5.9%

Tips for Oklahoma Taxpayers

• Take advantage of the exceptionally low 0.25% starting bracket rate
• Oklahoma doesn't tax Social Security - perfect for retirees
• Consider retirement income exemptions if you qualify
• Factor in the 4.5% sales tax when calculating total tax burden
• Groceries and prescription medications are sales tax exempt
• Compare Oklahoma's 4.75% top rate favorably with neighboring states