Best States for Side Hustles & Gig Income (2026)
Side hustle income faces a double tax hit: self-employment tax (15.3%) plus regular income taxes. While federal SE tax is the same everywhere, state income tax varies from 0% to 13.3%. This guide shows where side hustlers keep the most, factoring in both tax rates and cost of living.
- Oklahoma ranks #1 with the lowest cost of living at 83.
- Hawaii ranks last at 185.8 — the highest among all states.
- The top 5 states are Oklahoma, Alabama, Iowa, West Virginia, Kansas.
- The ranking basis, source limitations, and calculation method are documented in the Methodology section below.
Top 3 States
All 50 States Ranked
Lowest to highest by cost of living
| # | State | Cost of Living | Top Tax Rate | Median Income | Calculator |
|---|---|---|---|---|---|
| 1 | Oklahoma | 83 | 4.50% | $66,148 | Side Hustle Tax Calculator |
| 2 | Alabama | 86 | 5.00% | $66,659 | Side Hustle Tax Calculator |
| 3 | Iowa | 86.1 | 3.80% | $75,501 | Side Hustle Tax Calculator |
| 4 | West Virginia | 87 | 4.58% | $60,798 | Side Hustle Tax Calculator |
| 5 | Kansas | 87.1 | 5.58% | $75,514 | Side Hustle Tax Calculator |
| 6 | Mississippi | 87.4 | 4.00% | $59,127 | Side Hustle Tax Calculator |
| 7 | Missouri | 88.2 | 4.70% | $71,589 | Side Hustle Tax Calculator |
| 8 | Arkansas | 89 | 3.70% | $62,106 | Side Hustle Tax Calculator |
| 9 | Indiana | 89.7 | 2.95% | $71,959 | Side Hustle Tax Calculator |
| 10 | Tennessee | 89.7 | 0.00% | $71,997 | Side Hustle Tax Calculator |
| 11 | Georgia | 90.1 | 4.99% | $79,991 | Side Hustle Tax Calculator |
| 12 | Nebraska | 90.1 | 4.55% | $76,376 | Side Hustle Tax Calculator |
| 13 | New Mexico | 90.2 | 5.90% | $67,816 | Side Hustle Tax Calculator |
| 14 | North Dakota | 90.5 | 2.50% | $77,871 | Side Hustle Tax Calculator |
| 15 | Texas | 90.8 | 0.00% | $79,721 | Side Hustle Tax Calculator |
| 16 | Louisiana | 91.3 | 3.00% | $60,986 | Side Hustle Tax Calculator |
| 17 | Michigan | 92.1 | 4.25% | $72,389 | Side Hustle Tax Calculator |
| 18 | South Carolina | 92.7 | 5.21% | $72,350 | Side Hustle Tax Calculator |
| 19 | Ohio | 93 | 2.75% | $72,212 | Side Hustle Tax Calculator |
| 20 | Minnesota | 93.4 | 9.85% | $87,117 | Side Hustle Tax Calculator |
| 21 | South Dakota | 93.5 | 0.00% | $76,881 | Side Hustle Tax Calculator |
| 22 | Kentucky | 94 | 3.50% | $64,526 | Side Hustle Tax Calculator |
| 23 | Wyoming | 94.4 | 0.00% | $75,532 | Side Hustle Tax Calculator |
| 24 | Illinois | 94.5 | 4.95% | $83,211 | Side Hustle Tax Calculator |
| 25 | Pennsylvania | 95.3 | 3.07% | $77,545 | Side Hustle Tax Calculator |
| 26 | Wisconsin | 95.7 | 7.65% | $77,488 | Side Hustle Tax Calculator |
| 27 | North Carolina | 96.7 | 3.99% | $73,958 | Side Hustle Tax Calculator |
| 28 | Utah | 98.4 | 4.45% | $96,658 | Side Hustle Tax Calculator |
| 29 | Virginia | 99 | 5.75% | $92,090 | Side Hustle Tax Calculator |
| 30 | Idaho | 99.4 | 5.30% | $81,166 | Side Hustle Tax Calculator |
| 31 | Delaware | 100.6 | 6.60% | $87,534 | Side Hustle Tax Calculator |
| 32 | Florida | 100.8 | 0.00% | $77,735 | Side Hustle Tax Calculator |
| 33 | Colorado | 102.7 | 4.40% | $97,113 | Side Hustle Tax Calculator |
| 34 | Connecticut | 103.6 | 6.99% | $96,049 | Side Hustle Tax Calculator |
| 35 | Nevada | 105.4 | 0.00% | $81,134 | Side Hustle Tax Calculator |
| 36 | Montana | 106 | 5.65% | $75,340 | Side Hustle Tax Calculator |
| 37 | New Hampshire | 108.5 | 0.00% | $99,782 | Side Hustle Tax Calculator |
| 38 | Arizona | 108.6 | 2.50% | $81,486 | Side Hustle Tax Calculator |
| 39 | Oregon | 110.4 | 9.90% | $85,220 | Side Hustle Tax Calculator |
| 40 | Rhode Island | 110.9 | 5.99% | $83,504 | Side Hustle Tax Calculator |
| 41 | Maine | 112.9 | 9.15% | $76,442 | Side Hustle Tax Calculator |
| 42 | Vermont | 113.4 | 8.75% | $82,730 | Side Hustle Tax Calculator |
| 43 | Washington | 115.1 | 0.00% | $99,389 | Side Hustle Tax Calculator |
| 44 | Maryland | 118.8 | 6.50% | $102,905 | Side Hustle Tax Calculator |
| 45 | New Jersey | 119.2 | 10.75% | $104,294 | Side Hustle Tax Calculator |
| 46 | Alaska | 124.5 | 0.00% | $95,665 | Side Hustle Tax Calculator |
| 47 | New York | 132.6 | 10.90% | $85,820 | Side Hustle Tax Calculator |
| 48 | California | 140.3 | 13.30% | $100,149 | Side Hustle Tax Calculator |
| 49 | Massachusetts | 148.1 | 9.00% | $104,828 | Side Hustle Tax Calculator |
| 50 | Hawaii | 185.8 | 11.00% | $100,745 | Side Hustle Tax Calculator |
Methodology
How we collected and ranked the data
States are ranked by cost of living index (ascending), since low cost of living amplifies the value of side hustle income. Combined with state tax rates, this reveals where gig income stretches furthest. States with no income tax AND low COL are optimal. Sources: C2ER Cost of Living Index (via MERIC), Q2 2026 for prices, Census ACS 2024 for median household income.
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View all 107 state comparisonsFrequently Asked Questions
How much tax do I pay on side hustle income?
Side hustle profit is subject to 15.3% self-employment tax (Social Security + Medicare, on 92.35% of net earnings) plus federal income tax at your top bracket, plus state income tax where your state has one. Deducting business expenses reduces the profit all three apply to.
Do I need to report side hustle income if I don't get a 1099?
Yes. Self-employment earnings of $400 or more must be reported on your tax return whether or not you receive a 1099. The 1099 threshold only decides whether the payer files the form: $600 for payments through 2025, $2,000 for payments made from January 1, 2026 (IRS 2026 Instructions for Forms 1099-MISC and 1099-NEC, P.L. 119-21).