Mississippi Cuts Its Income Tax Rate to 4.00% for 2026
The lower rate took effect January 1. The first $10,000 of taxable income remains taxed at 0%.
Mississippi's individual income tax rate falls from 4.40% to 4.00% for 2026 on taxable income above $10,000. The reduction took effect January 1, while the first $10,000 of taxable income remains taxed at 0%. Taxpayers whose taxable income stays within that amount already owe no tax under the regular rate calculation.
The change completes the rate reductions scheduled under House Bill 531, the Mississippi Tax Freedom Act of 2022. The Mississippi Department of Revenue (DOR) lists 4.00% as the 2026 rate. A separate law enacted in 2025 sets additional cuts beginning in 2027.
How Much Does the Lower Rate Save?
The rate falls by 0.40 percentage points. For each $10,000 of taxable income above the untaxed amount, the rate cut saves $40 before credits. At the same taxable income, that is about a 9.1% reduction in the tax calculated on income above $10,000.
| Taxable Income | 2025 (4.40%) | 2026 (4.00%) | Savings |
|---|---|---|---|
| $80,000 | $3,080 | $2,800 | $280 |
| $160,000 | $6,600 | $6,000 | $600 |
For a single filer with $80,000 of Mississippi taxable income, the first $10,000 produces no tax. The remaining $70,000 is taxed at 4.00%, giving a $2,800 state income tax before credits, compared with $3,080 at the previous rate. At $160,000 of taxable income, the rate applies to $150,000, reducing the tax by $600.
Both examples use taxable income after Mississippi adjustments, deductions, and exemptions, not gross salary. The $10,000 taxed at 0% is part of the rate calculation and is separate from the standard deduction and personal exemption. Changes in income or credits can make the actual year-to-year savings different.
More Rate Cuts Are Scheduled After 2026
Governor Tate Reeves signed House Bill 1 on March 27, 2025, extending the reduction schedule beyond the 4.00% rate. The Mississippi Department of Revenue summarizes the next rates for taxable income above $10,000 as:
- 2027: 3.75%.
- 2028: 3.50%.
- 2029: 3.25%.
- 2030: 3.00%.
Beginning in 2031, further reductions depend on revenue and reserve-fund conditions written into the law. The legislation provides a path toward eliminating the individual income tax, but taxpayers should not assume it disappears on a guaranteed date.
Which Tax Year Uses the New Rate?
The 4.00% rate applies to the 2026 tax year, with calendar-year returns generally filed in 2027. Taxpayers estimating their 2026 Mississippi income tax should apply the new rate to the portion of taxable income above $10,000.
Our Mississippi income tax rate page explains the calculation and includes examples for single filers and two-earner married couples. For available Form 80-105 returns and instructions, visit our Mississippi income tax forms page and select the edition for the tax year you are filing.
References:
- House Bill 531: Mississippi Tax Freedom Act of 2022. Final text sent to the governor, Section 2. Establishes the untaxed first $10,000 and the 2025 and 2026 rate schedule. Mississippi Legislature. Retrieved September 24, 2026.
- General Information: Individual Income Tax. Year-specific rates, deductions, exemptions, and combined-return calculations. Mississippi Department of Revenue. Retrieved September 24, 2026.
- 2025 Legislation. Income Tax section, House Bill 1. Scheduled 2027-2030 rates and conditions for reductions beginning in 2031. Mississippi Department of Revenue. Retrieved September 24, 2026.
- Gov. Reeves Signs Historic Legislation Eliminating Mississippi's Individual Income Tax. March 27, 2025. Signing of House Bill 1 and its relationship to the 2022 law. Office of Governor Tate Reeves. Retrieved September 24, 2026.