HONOLULU (KHON2) — While Hawaii is considered to be one of the most expensive states to live in, residents might be surprised to learn that to be considered the richest in their community, their adjusted gross incomes (AGI) don’t need to be as high compared to other states.
A new analysis by SmartAsset reveals just how much it takes to be in the top 1% in all 50 states.
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The benchmark varies by state to be considered among the top 1% of earners. In Hawaii, you need an income of at least $453,000.
SmartAsset used tax data from the IRS to determine the minimum income required to be among the highest earners in each state, which were then ranked based on the AGI of those in the top 1%. According to the IRS, AGI is your gross income (wages, capital gains, retirement distribution, etc.) minus adjustments to income (student loan interest, alimony payments or contributions to a retirement account).
Key findings include the following:
- An American family needs a gross income of $597,815 to fall in the top 1% of earners nationally.
- Coastal states have the highest 1% income threshold.
- Top 1% earners pay at least 25% of the total income tax share in their states.
- The top 1% nationwide earns twice as much as the top 5%.
States where the 1% income threshold is the highest
- Connecticut: $896,490
- Massachusetts: $810,256
- New York: $777,126
- New Jersey: $760,462
- California: $745,314
States where the 1% income threshold is the lowest
- West Virginia: $350,212
- Mississippi: $361,462
- New Mexico: $384,427
- Arkansas: $411,633
- Kentucky: $412,836
This analysis was based on 2018 IRS data for tax units and adjusted to 2021 dollars using CPI figures from the Bureau of Labor Statistics.