To be a top earner in these states, your annual salary will need to top $1 million
SmartAsset ranked states based on the minimum pre-tax income needed to be considered a top 1% earner, based on the latest IRS tax return data.
Jaclyn DeJohn, CFP
Posted 8/19/24
SmartAsset ranked states based on the minimum pre-tax income needed to be considered a top 1% earner, based on the latest IRS tax return data.
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To be a top earner in these states, your annual salary will need to top $1 million
SmartAsset ranked states based on the minimum pre-tax income needed to be considered a top 1% earner, based on the latest IRS tax return data.
Posted
Jaclyn DeJohn, CFP
Jon Bilous // Shutterstock
The U.S. median income is around $75,000, with half of Americans earning less than that. High-income earners, on the other hand, can make 10 times that – or more. This top 1% also makes up a disproportionately large part of the tax base, with their incomes generally putting them in the highest federal tax bracket rate at 37%.
While state and local level taxes may impact the spread of high earners in those areas, the cost of living can also be drastically different nationwide. As a result, what it takes to be considered a top 1% income earner can differ by more than$500,000 from state to state.
With this in mind, SmartAsset ranked states based on the minimum pre-tax income needed to be considered a top 1% earner, based on the latest IRS tax return data.
Key Findings
It takes over $1 million per year in income to be in the top 1% in three states. Connecticut has the highest threshold to reach the top 1% of earners at $1.15 million. Massachusetts follows closely behind at $1.11 million, and California residents must similarly earn $1.04 million or more to be considered a top earner.
Nationwide, it takes $787,712 to be in the top 1% of earners. 1.49 million tax returns in the U.S. met this criteria in 2021. To be in the top 5% of American earners, you'll need to earn at least $290,185 annually.
It takes most to be in the top 1% in Washington D.C. Residents there need to earn $1.21 million to be among top earners. Just over 3,300 D.C. residents made the cut. To be in the top 5%, it'll take at least $424,592.
Those making as little as $420k are considered top 1% in this state. West Virginia has the lowest threshold to be a 1% earner at $420,453. Mississippi ranks second for lowest threshold at $440,744, while New Mexico residents need to make third-least at $476,196.
Washington and Wyoming climb the ranks. Overtaking New Jersey for fourth place, Washington residents need $989,649 to be in the top 1% of earners. Last year, the state ranked fifth with $804,853 needed. Wyoming breached the top 10 this year, displacing Illinois for ninth place. Wyoming residents need $843,121 to be a 1% earner in 2024.
It takes the most money to breach the top 5% of earners in Massachusetts. Ranking second for the top 1% earning threshold, Massachusetts residents need the most to reach the top 5% of earners in their state at $393,160. Across the United States, it takes an average of $290,185 to qualify for the top 5%.
10 State With the Highest Income Threshold to Reach the Top 1% of Earners
SmartAsset
Connecticut
Floor on top 1% income in 2024 dollars: $1,152,254
Floor on top 5% income in 2024 dollars: $370,060
Number of top 1% returns: 16,811
Number of top 5% returns: 84,055
Increase from top 1% threshold in 2023: $199,352
Massachusetts
Floor on top 1% income in 2024 dollars: $1,113,662
Floor on top 5% income in 2024 dollars: $393,160
Number of top 1% returns: 32,598
Number of top 5% returns: 162,990
Increase from top 1% threshold in 2023: $210,262
California
Floor on top 1% income in 2024 dollars: $1,035,673
Floor on top 5% income in 2024 dollars: $364,788
Number of top 1% returns: 177,645
Number of top 5% returns: 888,224
Increase from top 1% threshold in 2023: $191,407
Washington
Floor on top 1% income in 2024 dollars: $989,649
Floor on top 5% income in 2024 dollars: $377,265
Number of top 1% returns: 35,456
Number of top 5% returns: 177,279
Increase from top 1% threshold in 2023: $184,796
New Jersey
Floor on top 1% income in 2024 dollars: $975,645
Floor on top 5% income in 2024 dollars: $372,171
Number of top 1% returns: 42,437
Number of top 5% returns: 212,184
Increase from top 1% threshold in 2023: $158,299
New York
Floor on top 1% income in 2024 dollars: $965,645
Floor on top 5% income in 2024 dollars: $311,560
Number of top 1% returns: 92,142
Number of top 5% returns: 460,711
Increase from top 1% threshold in 2023: $188,983
Colorado
Floor on top 1% income in 2024 dollars: $865,700
Floor on top 5% income in 2024 dollars: $329,566
Number of top 1% returns: 27,447
Number of top 5% returns: 137,235
Increase from top 1% threshold in 2023: $156,609
Florida
Floor on top 1% income in 2024 dollars: $852,206
Floor on top 5% income in 2024 dollars: $276,217
Number of top 1% returns: 101,940
Number of top 5% returns: 509,701
Increase from top 1% threshold in 2023: $157,219
Wyoming
Floor on top 1% income in 2024 dollars: $843,121
Floor on top 5% income in 2024 dollars: $259,730
Number of top 1% returns: 2,616
Number of top 5% returns: 13,078
Increase from top 1% threshold in 2023: $187,003
New Hampshire
Floor on top 1% income in 2024 dollars: $811,098
Floor on top 5% income in 2024 dollars: $320,808
Number of top 1% returns: 6,742
Number of top 5% returns: 33,709
Increase from top 1% threshold in 2023: $152,060
Data and Methodology
To determine the income needed to be in the top 1% of earners in each state, SmartAsset reviewed 2021 data from the IRS for individual tax filers. Figures were adjusted to June 2024 dollars using the Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI-U) U.S. city average series for all items, not seasonally adjusted.
This story was produced by SmartAsset and reviewed and distributed by Stacker Media.