Workers in Indiana, Nebraska and Mississippi will pay lower state income tax rates on income earned in 2027. Indiana’s rate slips to 2.90% from 2.95%, Nebraska’s top rate falls to 3.99% from 4.55%, and Mississippi’s rate on income above $10,000 drops to 3.75% from 4%. All three cuts were already written into state law, so no new vote is needed for the rates to take effect Jan. 1.
Indiana and Nebraska step down on a set schedule
The cuts apply to tax years, not to a single payday. Each state’s schedule runs by calendar year, so income earned from Jan. 1, 2027 forward is taxed at the new rate, and the return for that year is filed in 2028.
Indiana’s flat rate is the smaller move. The Indiana Department of Revenue says the rate for 2026 is 2.95% “and will adjust in 2027 to 2.90%.” On $50,000 of Indiana adjusted gross income, that works out to $1,450 instead of $1,475, a saving of $25. County income taxes are separate, and the department notes that county rates can change in January and October…