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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.
10. 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.
9. 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.
8. 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.
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7. 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.
6. 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.
5. 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.
4. 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.
3. 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.
2. 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.
1. 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.
