Tennessee State Tax Calculator
Interest Income
Dividend Income
Estimated Tennessee Tax
$0.00
Understanding Tennessee State Taxes
Tennessee is one of the few states in the U.S. that does not have a broad-based income tax on wages and salaries. However, it does tax specific types of income. The state has a tax on interest and dividend income, commonly referred to as the "Hall Income Tax." As of January 1, 2021, the rate has been gradually reduced.
How the Hall Income Tax Works:
- Taxable Income: The Hall Income Tax applies only to income earned from interest and dividends. It does NOT apply to wages, salaries, capital gains, or other forms of income.
- Deductions: Taxpayers can deduct certain expenses, including up to $1,250 for single filers and $2,500 for married couples filing jointly from their interest and dividend income before the tax is applied. The calculator simplifies this by allowing you to input your total deductible expenses.
- Tax Rate: The tax rate on interest and dividend income has been phasing out. It was 3% in 2019, reduced to 2% in 2020, and further reduced to 1% effective January 1, 2021. This calculator uses the current rate structure.
- Exemptions: There are income thresholds below which certain taxpayers may be exempt. However, for simplicity, this calculator focuses on the direct calculation of tax on interest and dividend income after deductions.
Calculator Logic:
This calculator estimates your Tennessee state tax liability on interest and dividend income based on the following steps:
- Determine Taxable Income: The calculation begins with your reported Annual Income (from interest and dividends). This is then reduced by your specified Deductible Expenses.
- Apply Tax Rate: The net taxable income is then multiplied by the current Tennessee Hall Income Tax rate of 1%.
Formula:
Tax = (Annual Income - Deductible Expenses) * 0.01
Note: The calculator assumes the income entered is solely interest and dividend income subject to the Hall Income Tax. Always consult with a qualified tax professional or refer to official Tennessee Department of Revenue guidelines for precise tax advice.
This calculator is for informational purposes only and does not constitute tax advice. Tax laws are subject to change. Consult with a qualified tax professional for personalized advice.
function calculateTnTax() {
var incomeInput = document.getElementById("income");
var deductionsInput = document.getElementById("deductions");
var accountType = document.getElementById("accountType").value; // Not directly used in calculation for TN tax, but kept for potential future expansion or context.
var income = parseFloat(incomeInput.value);
var deductions = parseFloat(deductionsInput.value);
var taxResultElement = document.getElementById("taxResult");
// Clear previous error messages
taxResultElement.style.color = '#004a99';
taxResultElement.textContent = '$0.00';
// Input validation
if (isNaN(income) || income < 0) {
alert("Please enter a valid non-negative annual income.");
return;
}
if (isNaN(deductions) || deductions < 0) {
alert("Please enter valid non-negative deductible expenses.");
return;
}
// Tennessee Hall Income Tax Rate (as of Jan 1, 2021)
var tnHallIncomeTaxRate = 0.01; // 1%
var taxableIncome = income – deductions;
// Ensure taxable income is not negative
if (taxableIncome < 0) {
taxableIncome = 0;
}
var estimatedTax = taxableIncome * tnHallIncomeTaxRate;
// Format the result to two decimal places
taxResultElement.textContent = "$" + estimatedTax.toFixed(2);
}