/images/2026/03/25/man_on_phone_at_home.png)
/images/2019/12/06/smart_strategies_to_save_money_on_car_insurance.jpg)
:format(webp)/images/2026/01/27/woman-stressed-over-finances.jpg)
/authors/anna-armstrong-headshot_HSmm63F.jpg)
/authors/calista-headrick-headshot.jpg)
Add Us On Google
Taxes are a reality for every American, but the amount you pay can vary widely depending on your state. Federal taxes apply nationwide, but state income taxes can significantly reduce what you keep each year. Understanding these differences is key to smart financial planning and can help you maximize your retirement savings.
To better understand what the average person can expect to pay in taxes in 2026, we analyzed Census data along with federal and state tax rates to determine where individuals will pay the highest percentage of their annual income in taxes for the 2025 tax year (filing in 2026). Here are the 10 states with the highest tax burdens.
Get instant access to hundreds of discounts
Over 50? Join AARP today— because if you’re not a member you could be missing out on huge perks like discounts on travel, dining, and even prescriptions.
Get 25% off membership — just $15 for your first year with auto-renewal — and a free gift if you join today.
Colorado
Total Effective Tax Rate: 21.16%
Colorado residents earn a median annual income of $71,700, meaning that 21.16% of their income on average goes toward taxes. You can expect to pay about $12,709 in federal taxes and $2,462 in state income taxes, resulting in an effective federal tax rate of 17.72%.
Beyond income taxes, high local sales taxes, often exceeding 10% in some cities, and rising property assessments also contribute to the overall tax burden many residents experience.
Hawaii
Total Effective Tax Rate: 21.21%
Hawaii residents face a heavy tax burden, largely due to the state's income tax structure and broader tax system. At a median income of $60,531, individuals pay about $9,766 in federal taxes and $3,070 in state income taxes, with an effective state rate of 5.07%.
Hawaii's general excise tax on most goods and services also increases the overall tax pressure residents feel.
Illinois
Total Effective Tax Rate: 21.29%
Illinois taxpayers pay an effective tax rate of 21.29% on a median income of $65,318. Federal taxes account for roughly 16.56% of that total, while state taxes add another 4.73%.
Illinois uses a flat income tax system. The high tax burden is also linked to steep property taxes and the cost of funding large public pension obligations, which consume a significant share of the state budget.
Resolve $10,000 or more of your debt
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1 <p>Clients who complete the program and settle all debts typically save around 45% before fees or 20% including fees over 24–48 months, based on enrolled debts. “Debt-free” applies only to enrolled credit cards, personal loans, and medical bills. Not mortgages, car loans, or other debts. Average program completion time is 24–48 months; not all debts are eligible, and results vary as not all clients complete the program due to factors like insufficient savings. We do not guarantee specific debt reductions or timelines, nor do we assume debt, make payments to creditors, or offer legal, tax, bankruptcy, or credit repair services. Consult a tax professional or attorney as needed. Services are not available in all states. Participation may adversely affect your credit rating or score. Nonpayment of debt may result in increased finance and other charges, collection efforts, or litigation. Read all program materials before enrolling. National Debt Relief’s fees are based on a percentage of enrolled debt. All communications may be recorded or monitored for quality assurance. In certain states, additional disclosures and licensing apply. ©️ 2009–2025 National Debt Relief LLC. National Debt Relief (NMLS #1250950, CA CFL Lic. No. 60DBO-70443) is located at 180 Maiden Lane, 28th Floor, New York, NY 10038. All rights reserved. <b><a href="https://www.nationaldebtrelief.com/licenses/">Click here</a></b> for additional state-specific disclosures and licensing information.</p>
Sign up for a free debt assessment here.
Minnesota
Total Effective Tax Rate: 21.43%
If you live in Minnesota, you face a total effective tax rate of 21.43%. In Minnesota, residents pay 16.85% in federal taxes and 4.57% in state taxes.
Minnesota's high tax burden is mainly due to its high and strongly progressive state income taxes, which reach top rates over 9% and apply more meaningfully across upper-middle incomes than in many states.
Virginia
Total Effective Tax Rate: 21.43%
Like Minnesota, Virginia faces a total effective tax rate of 21.43%. The median annual income for residents is $67,034, which works out to paying $11,325 in federal taxes and $3,040 in state taxes.
Virginia's burden is driven by a broad income tax that reaches its top rate at relatively low income levels, meaning many middle-income earners pay the full rate.
New Jersey
Total Effective Tax Rate: 21.46%
For New Jersey residents, the state's effective tax rate is 21.46% on a median income of $73,606. Federal taxes account for 18.03%, while the state adds about 3.42%. That works out to about $13,274 in federal taxes and $2,519 in state income taxes.
New Jersey's high tax burden is driven primarily by very high property taxes and a highly progressive income tax, which together hit residents broadly.
New York
Total Effective Tax Rate: 22.09%
New Yorkers face an effective tax rate of 22.09%, meaning more than one-fifth of income goes to taxes. Residents earn a median income of $70,122 and pay roughly 17.46% in federal taxes, while the state adds 4.64%.
High property taxes, steep local taxes in areas like New York City, and significant spending on public services, education, and infrastructure all contribute to the state's elevated tax burden.
Maryland
Total Effective Tax Rate: 22.40%
Residents of Maryland earn a median income of $74,296 and pay $13,478 in federal taxes and $3,165 in state taxes, on average.
Maryland's high tax burden is driven primarily by its state income tax combined with relatively high local income taxes (unique among states), along with solid property taxes that fund strong spending on education and public services.
Massachusetts
Total Effective Tax Rate: 23.52%
Massachusetts has one of the heaviest tax burdens in the country, with residents paying an effective rate of 23.52%.
The state's median income of $78,811 is the highest in the nation. Residents face the highest effective federal tax rate nationwide at 18.80%, along with a 4.72% state income tax burden.
Earn $200 cash rewards bonus with this incredible card
The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
Cardholders can also earn unlimited 2% cash rewards on purchases.
The best part? There's no annual fee.
Oregon
Total Effective Tax Rate: 24.41%
Oregon tops the list with the highest tax burden in the country at 24.41%. A major factor is the state's 7.86% effective state tax rate, which is higher than that of any other state. Federal taxes account for about 16.55% of income.
Even though Oregon's federal tax burden is not the highest nationally, its steep state income taxes push the total tax share to the top.
Bottom line
Where you live greatly affects how much of your income goes to taxes. In high-tax states like Oregon, Massachusetts, and Maryland, higher state rates and median incomes push the total burden above the 19.37% national average.
For planning ahead, knowing your state's tax landscape is key. A few extra percentage points can make it harder to save or get out of tax debt, impacting long-term financial comfort.
More from FinanceBuzz:
- 7 things to do if you’re barely scraping by financially.
- Find out if you're overpaying for car insurance in just a few clicks.
- Make these 7 savvy moves when you have $1,000 in the bank.
- 14 benefits seniors are entitled to but often forget to claim
/images/2021/04/21/adobestock_192812280_1200x628.jpg)
/images/2019/12/06/smart_strategies_to_save_money_on_car_insurance.jpg)
/images/2025/01/28/adobestock_628402894_1.jpeg)
/images/2024/09/04/adobestock_669069249_editorial_use_only_1.jpeg)
/images/2020/03/02/tattoo-woman-bar.jpeg)
/images/2020/12/21/smiling-couple-looking-at-laptop-screen.jpeg)
Intro Offer
Discover will match all the cash back you’ve earned at the end of your first year.
Annual Fee $0 Why we like it
/images/2025/01/23/discover_it_cash_back_card_art_gold.png)
/images/2022/04/20/senior-couple-happy-laptop-computer.jpg)
/images/2022/02/04/woman_with_lottery_ticket.jpg)
/images/2021/05/05/happy-young-investor.jpg)
/images/2025/10/09/senior-couple-reviewing-documents.jpg)
/images/2025/06/12/gas-station-refueling-adobe.jpg)
/images/2024/04/21/managing-bank-finances-calculating-taxes.jpg)
/images/2026/02/04/donald-trump_1.jpg)
/images/2026/03/20/gold-silver-bars.jpg)
/images/2026/01/27/concerned-retired-couple-laptop.jpg)
/images/2026/01/21/internal-revenue-service-sign_1.jpg)
