Individual Income Tax

The individual income tax, or personal income tax, is Oklahoma’s largest single revenue source for state government. Oklahoma first levied an income tax in 1915. The top income tax rate has been cut repeatedly since the late 1990s, and most recently was lowered by HB 2764 (2025) to 4.50 percent as of 2026. That legislation also created a trigger mechanism that will automatically lower the top income tax rate by 0.25 annually whenever certain revenue growth targets have been met until the personal income tax is reduced to 0. 

Oklahoma has a graduated income tax, with multiple tax brackets; however, the top rate applies to all taxable income above just $7,200 for an individual or $12,200 for a married couple filing jointly or single head of household. As of 2026, the number of brackets has been reduced from six to four. Numerous deductions and credits can reduce state taxable income, including the standard deduction, personal exemption, earned income tax credit, child tax credit, and others.

The individual income tax is paid to the state in annual or quarterly payments or in withholdings from wages and other payments. Taxpayers file a return in April to settle the tax liability or credit for the previous year.

As of FY 2026, the lion’s share of individual income tax collections (85.41 percent) is apportioned to the General Revenue Fund, with the remainder divided between the 1017 Fund (8.34 percent), the Teachers’ Retirement Fund (5.25 percent) and the Ad Valorem Reimbursement Fund (1.00 percent).

Individual income tax collections totaled $4.961 billion in FY 2024, accounting for 37.1 percent of total tax revenue.