Oklahoma Cuts Its Top Income Tax Rate to 4.50% for 2026

Three lower brackets become a zero-rate band, while the remaining rates fall by 0.25 percentage points.

By: John Napoletano

Published: January 12, 2026

Oklahoma begins 2026 with a lower top individual income tax rate and fewer brackets. The top rate falls from 4.75% to 4.50% under House Bill 2764, enacted in 2025. The law also removes tax on the first $3,750 of taxable income for single filers and the first $7,500 for married couples filing jointly.

The Oklahoma Tax Commission (OTC) lists the new schedule in its summary of the legislation. Three positive rates remain: 2.50%, 3.50%, and 4.50%, alongside a 0% band. That means the savings can come from both the lower rates and the income that is no longer taxed.

Lawmakers presented the change as a way to simplify the tax code and improve Oklahoma's competitiveness. In a May 22 announcement, Senate President Pro Tempore Lonnie Paxton said a simpler code and a path to lower taxes would make the state more attractive to businesses and families.

Six Taxed Brackets Become Three, Plus a Zero-Rate Band

The table below compares Oklahoma's 2025 and 2026 income tax rates for single filers. The first three rows retain the old income ranges to show how they combine into one 0% band through $3,750 in 2026. Each of the three remaining rates falls by 0.25 percentage points.

Married individuals filing separately use the same thresholds as single filers. For married couples filing jointly, heads of household, and qualifying surviving spouses, the 0% band extends through $7,500. The next bands end at $9,800 and $14,400, with 4.50% applying only to taxable income above $14,400.

How Much Do the Rate and Bracket Changes Save?

The following table compares Oklahoma income tax for 2025 and 2026 at $80,000 and $160,000 of taxable income for single filers. Both examples use the statutory rate schedules, hold taxable income constant, and exclude credits. Dollar amounts are rounded independently, with savings and percentages calculated before rounding.

At $80,000 of taxable income, the tax on the first $7,200 falls from $153.50 to $109.25, saving $44.25. The lower top rate saves another $182 on the remaining $72,800. Together, those changes reduce the tax by $226.25 before rounding.

At $160,000, the saving on the first $7,200 is still $44.25, while the saving above that amount rises to $382. The total reduction is $426.25. The dollar saving grows with income, but it represents a smaller percentage of the prior year's tax in this example.

These are taxable-income amounts after Oklahoma adjustments, deductions, and exemptions, not gross salary. Changes in income or other tax provisions can make a taxpayer's actual year-to-year savings different from these examples.

Further Reductions Depend on State Revenue

House Bill 2764 also creates a process for further reductions toward eliminating the individual income tax. Additional cuts of 0.25 percentage points depend on revenue benchmarks and certification by the State Board of Equalization. They are conditional, rather than a promise that the rate will fall every year.

Which Tax Year Uses the New Rates?

The new schedule applies to the 2026 tax year, with calendar-year returns generally filed in 2027. Taxpayers estimating their 2026 Oklahoma income tax should account for the zero-rate band and all three positive rates, rather than multiplying all taxable income by 4.50%.

Our Oklahoma income tax rates and brackets page explains the calculation and provides examples for single and joint filers. For available Form 511 returns and instructions from the Oklahoma Tax Commission, visit our Oklahoma income tax forms page and select the edition for the tax year you are filing.

Income Tax News Legislation 2026