Mississippi’s income tax rate is approximately 4% in 2026 — the result of a sweeping 2022 tax reform that has progressively cut the top rate from 5% down in annual steps. Combined with its extraordinary retirement income exemptions — Social Security, pensions, 401(k) and IRA withdrawals are all exempt — Mississippi is one of the most tax-friendly states for retirees in the South. The tradeoff is a 7% state sales tax, one of the highest in the country.
Mississippi Income Tax Rate 2026
Mississippi transitioned from a graduated system to an effective flat rate through 2022 reform legislation (HB 531). The rate on taxable income above exemptions has been declining each year:
| Tax Year | Rate on Taxable Income |
|---|---|
| 2022 | 5.0% |
| 2023 | 4.7% |
| 2024 | 4.7% |
| 2025 | 4.4% |
| 2026 | ~4.0% |
Verify the exact 2026 rate with the Mississippi Department of Revenue — the schedule may be subject to revenue triggers.
Mississippi Personal Exemption and Standard Deduction
Mississippi income tax does not apply to all income — the personal exemption and standard deduction carve out a meaningful portion of income that is not taxed at all.
| Filing Status | Personal Exemption | Standard Deduction | Total Untaxed |
|---|---|---|---|
| Single | $6,000 | $2,300 | $8,300 |
| Married Filing Jointly | $12,000 | $4,600 | $16,600 |
| Head of Household | $8,000 | $3,400 | $11,400 |
| Each dependent | $1,500 | — | $1,500 |
A married couple with two dependents can shield the first $19,600 of income before any Mississippi tax applies.
Mississippi Tax Calculation Examples
Single filer earning $50,000:
- Gross income: $50,000
- Personal exemption: −$6,000
- Standard deduction: −$2,300
- Taxable income: $41,700
- Tax at 4%: $1,668
- Effective rate on gross income: 3.3%
Married couple earning $80,000:
- Gross income: $80,000
- Personal exemption: −$12,000
- Standard deduction: −$4,600
- Taxable income: $63,400
- Tax at 4%: $2,536
- Effective rate on gross income: 3.2%
Mississippi Retirement Income: Broadly Exempt
Mississippi’s retirement income tax treatment is among the most generous in the United States. The state exempts a wide range of retirement income that other states tax:
| Income Type | Mississippi Treatment |
|---|---|
| Social Security | Fully exempt |
| State and government pensions | Fully exempt |
| Private pensions | Fully exempt |
| Military retirement pay | Fully exempt |
| 401(k) distributions | Fully exempt |
| Traditional IRA withdrawals | Fully exempt |
| Railroad Retirement | Fully exempt |
| Annuity income | Largely exempt (qualified plans) |
| Earned income (wages) | Taxable at 4% |
This is not a partial exemption with income caps — Mississippi generally excludes the entire amount of these income types from state taxable income. A retiree living on Social Security plus IRA distributions plus a pension effectively pays zero Mississippi income tax on that income, regardless of the total amount.
This retirement income exemption makes Mississippi notable even compared to lower-rate states. A state with a 3% flat rate that taxes all retirement income may cost a retiree more than Mississippi’s 4% rate that exempts retirement income entirely.
Mississippi vs. Southern States
| State | Top Rate | Retirement Income |
|---|---|---|
| Florida | 0% | N/A (no income tax) |
| Tennessee | 0% | N/A (no income tax) |
| Texas | 0% | N/A (no income tax) |
| Mississippi | ~4% | Broadly exempt |
| Alabama | 5% | Exempt (many types) |
| Georgia | 5.39% | Partial exemption |
| South Carolina | 6.4% | Partial exemption |
| Louisiana | 3% (top) | Partial exemption |
Mississippi can’t compete with Florida and Tennessee on raw rate, but its complete exemption of retirement income eliminates the effective state tax burden for most retirees — making it similar in practice to a no-income-tax state for retired households.
Mississippi Property Tax
Mississippi property taxes are low by national standards:
| Metric | Mississippi |
|---|---|
| Average effective rate | ~0.65% |
| National average | ~1.10% |
| On a $200,000 home | ~$1,300/year |
| On a $300,000 home | ~$1,950/year |
Property is assessed at varying percentages of market value depending on property classification:
- Single-family residential: 10% of true value
- Commercial: 15% of true value
- Industrial: 15% of true value
A $250,000 home has an assessed value of $25,000, and tax rates are applied to that assessed value. Tax rates vary significantly by county and municipality.
Homestead Exemption
Mississippi’s standard homestead exemption reduces the assessed value used to calculate property taxes for owner-occupants:
| Exemption Type | Reduction to Assessed Value |
|---|---|
| Standard (all owner-occupants) | $300 |
| Age 65+ or totally disabled | $7,500 (up to $300 credit) |
| 100% disabled veteran | Full exemption possible |
Mississippi Sales Tax
Mississippi’s 7% state sales tax is one of the highest in the nation and applies to most purchases including groceries:
| Item Type | Rate |
|---|---|
| General purchases | 7% |
| Groceries | 7% |
| Prescription drugs | Exempt |
| Farm equipment | 1.5% |
| Manufacturing equipment | 1.5% |
Local governments can add sales taxes, bringing total rates in some cities to 8% or higher. Jackson has a combined rate of approximately 8%.
The grocery tax is a meaningful cost for families and lower-income retirees — and is one of the most-cited criticisms of Mississippi’s tax structure.
Mississippi Capital Gains
Mississippi taxes capital gains as ordinary income at the same rate as other income. There is no preferential rate for long-term capital gains:
| Gain Type | Mississippi Rate |
|---|---|
| Short-term gains | ~4% (ordinary income rate) |
| Long-term gains | ~4% (ordinary income rate) |
Unlike some states, Mississippi does not offer a capital gains exclusion or reduced rate.
Local Income Taxes
Mississippi has no local income taxes. The only income tax is the state-level rate. Cities and counties rely primarily on sales tax and property tax for local revenue.
Filing Requirements
| Filing Status | Filing Threshold |
|---|---|
| Single | $8,300 |
| Married Filing Jointly | $16,600 |
| Part-year or non-resident | Any Mississippi source income |
Filing deadline: April 15. Mississippi conforms to the federal extension rules.
Electronic filing is available free through the Mississippi Department of Revenue portal.
Who Should Consider Mississippi?
Good fit for:
- Retirees drawing income from pensions, Social Security, and retirement accounts — effective state tax rate near zero
- Military retirees — full exemption on military retirement pay
- Those moving from high-tax states (CA, NY, IL, NJ) seeking low cost of living
- Homeowners — property taxes are well below national average
Consider before moving:
- 7% sales tax on groceries is a recurring cost that hits all income levels
- Mississippi has the highest poverty rate in the US — public services, infrastructure, and schools vary widely by area
- Job market is limited outside of healthcare, government, and manufacturing sectors
- Combined state + local sales taxes of 7–8% can offset income tax savings for high-spending households
For a side-by-side comparison of every state’s income tax rates, see state income tax rates by state 2026 and best and worst states for taxes 2026. Federal income tax applies on top of state taxes — see 2026 federal income tax brackets to calculate your combined liability.
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