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23 April 2025

Mississippi lowers personal income tax rates in future years with total phase out possible if revenue goals are met

On March 27, 2025, Mississippi Governor approved H.B. 1, which lowers the personal income tax rates in tax years 2026 through 2030 and provides for a possible total phase out of the income tax after 2030 if revenue goals are met.

Under H.B. 1, the personal income tax rates for 2026 through 2030 are as follows:

  • 2026: 4.00%
  • 2027: 3.75%
  • 2028: 3.50%
  • 2029: 3.25%
  • 2030: 3.0%

Starting in 2031, and if revenue goals are met, further annual decreases in the personal income tax will apply until the rate reaches 0%.

H.B. 1 builds upon H.B. 531, enacted in 2022, which replaced the state's graduated tax with a flat tax of 4.7% in 2024, 4.4% in 2025 and 4.0% in 2026. (Tax Alert 2022-0602.)

Ernst & Young LLP insights

For tax years 2026 through 2030, employers will need to annually update the Mississippi income tax withholding formula published here.

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2025-0936

 

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