To be a top earner in these states, your annual salary will need to top $1 million

To be a top earner in these states, your annual salary will need to top $1 million

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

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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.