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Wyoming Taxes 2026: What You Need to Know
Federal, State, and Local Tax Withholding in Wyoming in 2026
In 2026, Wyoming continues to offer a highly tax-friendly environment for residents due to its complete absence of a state income tax on wages. While residents are still required to pay federal income taxes and other mandatory federal withholdings, Wyoming’s lack of a state income tax simplifies overall tax obligations and allows residents to keep a greater portion of their earnings. Here is a detailed breakdown of tax withholding in Wyoming for 2026.
| Tax Type | Details |
|---|---|
| Federal Income Tax | Wyoming residents are subject to federal income tax, which follows a progressive tax system with rates ranging from 10% to 37%, depending on income levels. The One Big Beautiful Bill Act (OBBBA), signed in July 2025, made these seven tax rates permanent. The federal tax is withheld from each paycheck and is based on brackets established by the IRS. (Source: IRS) |
| State Income Tax | Wyoming does not have a state income tax on wages. The Wyoming Constitution, Article 15, prohibits a state income tax on income. This applies to personal earnings, retirement income, investment income, and capital gains. Unlike many other states, Wyoming residents do not pay a percentage of their earnings to the state, significantly reducing the overall tax burden. (Source: Wyoming DOR) |
| Local Income Taxes | Wyoming also has no local income taxes, meaning residents do not need to worry about municipal income tax withholdings on their paychecks. However, sales taxes may vary by county and municipality, with local governments authorized to add up to 2% on top of the state’s 4% sales tax rate, making the total sales tax in some areas up to 6%. This does not affect payroll directly as it is not deducted from wages. (Source: Wyoming Excise Tax Division) |
2026 Federal Tax Brackets (Single Filers):
| Taxable Income | Rate |
|---|---|
| Up to $12,400 | 10% |
| $12,401 to $50,400 | 12% |
| $50,401 to $105,700 | 22% |
| $105,701 to $201,775 | 24% |
| $201,776 to $256,225 | 32% |
| $256,226 to $640,600 | 35% |
| Over $640,600 | 37% |
2026 Federal Tax Brackets (Married Filing Jointly):
| Taxable Income | Rate |
|---|---|
| Up to $24,800 | 10% |
| $24,801 to $100,800 | 12% |
| $100,801 to $211,400 | 22% |
| $211,401 to $403,550 | 24% |
| $403,551 to $512,450 | 32% |
| $512,451 to $768,700 | 35% |
| Over $768,700 | 37% |
Source: IRS 2026 Tax Inflation Adjustments
The absence of state and local income taxes makes Wyoming one of the most attractive states in the nation for those looking to minimize their overall tax liabilities. Residents still contribute to federal programs through FICA taxes (Social Security and Medicare), but the simplicity of Wyoming’s state-level tax policy makes it an appealing state for employees and employers alike.
FICA and State Insurance Taxes in Wyoming in 2026
In Wyoming, Federal Insurance Contributions Act (FICA) taxes are a mandatory part of payroll taxes for all residents. These contributions fund Social Security and Medicare. Both employees and employers contribute to FICA taxes. For 2026, there are important updates to FICA limits that HR professionals and payroll departments must implement.
| Tax Type | Rate | Income Limit |
|---|---|---|
| Social Security | 6.2% | On wages up to $184,500 (increased from $176,100 in 2025). Employees contribute 6.2% of their earnings to Social Security. Employers match this contribution, meaning a combined total of 12.4% is contributed per employee. For self-employed individuals, the entire 12.4% must be paid, although half can be claimed as a deduction. (Source: SSA) |
| Medicare | 1.45% | All wages are subject to the Medicare tax of 1.45%. There is no income cap for the regular Medicare tax. Employers match the standard 1.45%, leading to a combined contribution of 2.9% on all wages. (Source: IRS Topic 751) |
| Additional Medicare Tax | 0.9% | Applies to wages exceeding $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately. This additional amount is not matched by employers and is solely the responsibility of the employee. Employers are required to begin withholding it once they pay an employee more than $200,000 in wages in a calendar year, regardless of filing status. (Source: IRS Topic 751) |
Key Details of Wyoming’s FICA Contributions for 2026:
Social Security Tax:
- Employee Rate: 6.2%
- Employer Match: 6.2%
- 2026 Wage Base: $184,500 (up from $176,100 in 2025)
- Maximum employee Social Security tax: $11,439
Medicare Tax:
- Employee Rate: 1.45% on all wages
- Employer Match: 1.45% on all wages
- Additional Medicare Tax: 0.9% on wages exceeding $200,000 (single) or $250,000 (joint), paid by the employee with no employer match
Employer Responsibilities: Employers are required to match the Social Security and Medicare contributions for each employee, effectively doubling the overall contribution to these programs (12.4% for Social Security and 2.9% for Medicare). HR teams must update payroll systems to reflect the new $184,500 Social Security wage base for 2026. Once an employee’s cumulative wages reach $184,500, Social Security withholding stops for the remainder of the year.
Self-Employed Individuals: For those who are self-employed, the FICA tax obligation includes paying both the employee and employer portions, 12.4% for Social Security and 2.9% for Medicare. However, self-employed workers can deduct half of these FICA taxes when filing their income tax returns.
Sources: SSA Wage Base 2026 | IRS Topic No. 751 | IRS Notice 2025-67
State Unemployment Insurance Tax in Wyoming in 2026
Wyoming’s unemployment insurance (UI) program is managed by the Wyoming Department of Workforce Services (DWS). UI taxes are paid by employers only and are not deducted from employee wages. Key facts for 2026:
The taxable wage base for 2026 is $33,800 per employee, up from $32,400 in 2025. This means UI taxes apply only to the first $33,800 in wages paid to each employee in a calendar year; wages above that threshold are not taxed for UI purposes. Employer tax rates are assigned per Wyoming Statute W.S. 27-3 Article 5 and vary based on each employer’s experience rating and industry. New employers are assigned a base rate calculated on their specific industry. Employers with at least three years of experience on their account receive a rate based on their specific benefit ratio plus additional rate factors. Annual rate notices are mailed to employers no later than December 31 of the prior year.
For claimants, as of July 6, 2025, the weekly UI benefit ranges from a minimum of $47 to a maximum of $651. UI benefits are considered taxable income for federal income tax purposes. Claimants can choose to have 10% of their benefits automatically withheld for federal taxes.
Sources: Wyoming DWS Unemployment Taxable Wage Base | Wyoming DWS Unemployment Tax Rates | Wyoming DWS UI FAQ
Pre-Tax Deductions (Medical Insurance, 401(k), HSA, FSA, etc.) in Wyoming in 2026
In Wyoming, residents can reduce their federal taxable income by using various pre-tax deductions. These deductions help reduce the amount of income subject to federal income taxes and FICA taxes, ultimately increasing take-home pay. Because Wyoming has no state income tax, these deductions primarily impact federal tax liability.
Key Pre-Tax Deductions for Wyoming Residents in 2026:
| Deduction Type | 2026 Contribution Limits |
|---|---|
| Health Insurance Premiums | Varies depending on employer-sponsored plans. Employer-sponsored health insurance premiums for medical, dental, and vision coverage are generally paid with pre-tax dollars, reducing the employee’s federal taxable income. The specific amount deducted depends on the plan chosen and is usually taken directly from each paycheck. |
| 401(k) Contributions | $24,500 for employees (up from $23,500 in 2025). Employees aged 50 or older can make additional catch-up contributions of $8,000 (up from $7,500 in 2025), bringing the total possible contribution to $32,500. Employees aged 60 to 63 have a higher SECURE 2.0 super catch-up limit of $11,250. (Source: IRS) |
| IRA Contributions | The limit on annual contributions to an IRA increases to $7,500 (up from $7,000 in 2025). The IRA catch-up contribution for individuals aged 50 and over is $1,100 (up from $1,000 in 2025). (Source: IRS) |
| Health Savings Accounts (HSAs) | $4,400 for self-only coverage (up from $4,300 in 2025) and $8,750 for family coverage (up from $8,300 in 2025). Individuals aged 55 and older can contribute an additional $1,000. HSA contributions require enrollment in a qualifying High-Deductible Health Plan (HDHP). (Source: IRS Notice 2025-67) |
| Health Flexible Spending Accounts (FSAs) | $3,400 for medical FSAs (up from $3,300 in 2025). If the FSA plan allows unused amounts to carry over, employees can carry over up to $680 (up from $660 in 2025). FSAs generally operate on a “use-it-or-lose-it” basis. (Source: IRS) |
Employer-Sponsored Plans and Matching Contributions:
Many employers offer matching contributions for 401(k) accounts, which boost employee retirement savings at no additional cost to the employee. Because Wyoming has no state income tax, all pre-tax benefit deductions flow directly to reducing federal taxable income, making their impact on take-home pay particularly meaningful for Wyoming workers compared to employees in high-tax states.
2026 Wyoming Tax Table Summary
| Tax Type | Rate/Percentage |
|---|---|
| Wyoming State Income Tax | 0% (No state income tax; prohibited by the Wyoming Constitution) |
| FICA: Social Security | 6.2% on wages up to $184,500 |
| FICA: Medicare | 1.45% on all wages (additional 0.9% on wages over $200,000) |
| Federal Income Tax | Progressive, 10% to 37%, based on 2026 IRS federal tax brackets |
| Wyoming State Sales Tax | 4% state rate; counties may add up to 2% (total up to 6%) |
| Wyoming Unemployment Insurance | Varies by employer experience rating; taxable wage base: $33,800 per employee |
Sources: IRS 2026 Inflation Adjustments | SSA Wage Base | Wyoming Excise Tax Division | Wyoming DWS UI Taxable Wage Base
Wyoming Tax Brackets 2026
Wyoming does not levy a state income tax on wages, which provides a major financial advantage to its residents. The Wyoming Constitution, Article 15, Section 18, prohibits any tax on income. This prohibition covers personal earnings, retirement income, investment income, and business profits, and changing it would require a two-thirds supermajority vote in both legislative chambers plus voter approval in a referendum. For 2026, the state income tax rate remains at 0% for all income levels and all filing statuses.
| Income Level | Wyoming State Tax Rate |
|---|---|
| All income levels | 0% |
Source: Wyoming Department of Revenue
Wyoming’s zero percent state income tax policy makes it highly attractive not only for residents but also for businesses looking to establish operations in a tax-friendly environment. This policy is one of the key reasons Wyoming is viewed as exceptionally favorable for employees, retirees, and remote workers who want to keep more of their income.
Contributions to State Revenue:
Although Wyoming has no income tax, it generates revenue through other forms of taxation that contribute to state and local government services.
Sales Tax: Wyoming imposes a state sales tax of 4%. Counties and cities may impose an additional local option sales tax of up to 2%, creating a maximum combined rate of 6% depending on location. There are 107 local tax jurisdictions across the state. Unprepared food for home consumption and prescription drugs are exempt from Wyoming sales tax. (Source: Wyoming Excise Tax Division)
Property Tax: Wyoming’s property tax is administered by local county assessors. Residential properties are assessed at 9.5% of fair market value, and the effective property tax rate is among the lowest in the nation. Property taxes are a significant source of funding for public schools and local government services. (Source: Wyoming DOR Property Tax Division)
Severance and Mineral Taxes: A significant portion of Wyoming’s state revenue comes from severance taxes on natural resources including coal, natural gas, and oil. The Wyoming Department of Revenue’s Mineral Tax Division collects these taxes, which fund state and local governments and allow Wyoming to avoid taxing residents’ income. (Source: Wyoming DOR Mineral Tax Division)
Estate and Inheritance Tax: Wyoming does not impose any state estate or inheritance tax.
2026 Federal Standard Deduction: Key Update for Wyoming Workers
Because Wyoming has no state income tax, your federal return is the only income tax return you file. This makes the 2026 federal standard deduction particularly important for Wyoming residents. The standard deduction has increased for all filing statuses in 2026:
| Filing Status | 2026 Standard Deduction |
|---|---|
| Single / Married Filing Separately | $16,100 (up from $15,750 in 2025) |
| Married Filing Jointly | $32,200 (up from $31,500 in 2025) |
| Head of Household | $24,150 (up from $23,625 in 2025) |
Additionally, under the One Big Beautiful Bill Act, a temporary senior deduction of $6,000 (up to $12,000 for married couples filing jointly) is available to taxpayers aged 65 and older with adjusted gross income below $75,000 for single filers and $150,000 for joint filers, available through 2028.
Source: IRS Publication 505 (2026) | IRS 2026 Inflation Adjustments
New Federal Deductions Available to Wyoming Workers in 2026
The One Big Beautiful Bill Act introduced several new deductions for the 2026 tax year that Wyoming employees and HR professionals should be aware of. These apply to the federal return only, but since Wyoming workers have no state income tax, maximizing federal deductions is the primary strategy for reducing total tax liability.
Tips Deduction: Tipped workers may be eligible to deduct up to $25,000 in qualified tip income from their federal taxable income.
Overtime Pay Deduction: Nonexempt employees who work more than 40 hours per week may deduct up to $12,500 ($25,000 for joint filers) of qualified overtime pay from federal taxable income.
Auto Loan Interest Deduction: Individuals may deduct up to $10,000 in interest on qualified passenger vehicle loans.
All three deductions are available to taxpayers who take the standard deduction and do not require itemizing. Each phases out based on income level.
Source: IRS New and Enhanced Deductions for Individuals
Wrapping It Up
Wyoming’s 2026 tax landscape is defined by one foundational advantage: no state income tax, constitutionally protected and permanent. For HR professionals managing payroll in Wyoming, the key compliance items for 2026 are the increased Social Security wage base of $184,500, updated federal income tax brackets and a higher standard deduction resulting from the One Big Beautiful Bill Act, increased 401(k) limits to $24,500, and the higher UI taxable wage base of $33,800 per employee. Employees benefit from higher pre-tax contribution limits across 401(k), IRA, HSA, and FSA accounts, all of which reduce federal taxable income and increase take-home pay.
For the most current rates, forms, and guidance, visit the Wyoming Department of Revenue at revenue.wyo.gov, the Wyoming Department of Workforce Services at dws.wyo.gov, and the IRS at irs.gov.
