California, Texas, and New York lead in total federal income tax collected
The three states that pay the most federal income tax are California, Texas, and New York, in that order. California alone accounts for roughly 15 percent of all federal income tax collected nationwide. Texas and New York each contribute around 8 to 9 percent. These rankings reflect both the size of each state's population and the income levels of residents, since federal income tax is calculated on individual earnings.
The amount a state pays in federal taxes changes year to year based on how much money residents earn and how many people live there. States with larger populations and higher average incomes naturally pay more in total. This is different from asking which states have the highest tax rates—that is a separate question about the percentage of income taken, not the dollar total sent to Washington.
Understanding which states pay the most can help you see how federal tax revenue is distributed across the country and why some states receive more federal funding for programs while others receive less. The relationship between what a state pays in and what it receives back in federal spending is not always equal.
Key Takeaways
- California, Texas, and New York pay more federal income tax than any other states because they have large populations and higher average household incomes.
- A state's total federal tax payment depends on how many people live there and how much money they earn, not on state tax rates.
- The top ten states by federal tax contribution include Florida, Pennsylvania, Illinois, Ohio, Georgia, and North Carolina, though the exact order shifts slightly year to year.
- Some states that pay less in total federal taxes may have higher per-capita income, meaning residents earn more on average but the state has fewer people overall.
Why population and income matter more than tax rates
Federal income tax is a tax on individual earnings, not a tax on states themselves. The amount your state contributes to federal revenue depends entirely on how much money people in that state earn and how many people live there. A state with a smaller population but very high average incomes might pay less in total than a state with a larger population and lower average incomes.
For example, Wyoming has some of the lowest state income tax rates in the country, but it pays relatively little in federal income tax because it has fewer than 600,000 residents. California, by contrast, has nearly 40 million residents, and even though not all of them earn high incomes, the sheer number of taxpayers means the total federal tax collected is enormous.
This is why looking at total federal tax by state can be misleading if you are trying to understand tax burden. A better measure of how much tax individual residents pay is per-capita federal income tax—that is, the average amount each person in the state pays. That number varies widely and tells a different story than the state totals.
The top ten states by federal income tax contribution
After California, Texas, and New York, the next tier of high-tax-paying states includes Florida, Pennsylvania, Illinois, Ohio, Georgia, and North Carolina. These rankings are based on the most recent Internal Revenue Service data and can shift slightly from year to year as populations grow and incomes change.
Florida's ranking has climbed in recent years as the state's population has grown and more high-income residents have moved there. Pennsylvania and Illinois have historically been in the top ten because of their large populations and established urban centers. Ohio and Georgia also have significant populations spread across multiple metropolitan areas, which contributes to their federal tax totals.
The exact order of states five through ten can vary depending on which year's data you are looking at. Economic conditions, migration patterns, and changes in average income all affect how much federal tax a state pays in any given year. The top three—California, Texas, and New York—have remained consistent for decades because of their size.
How federal tax revenue relates to federal spending by state
A common question is whether states that pay more in federal taxes also receive more federal spending. The answer is not straightforward. Some states that pay large amounts in federal income tax receive less in federal spending per capita, while other states receive more federal dollars than they pay in taxes.
This happens because federal spending includes not just income tax revenue but also payroll taxes, corporate taxes, and other sources. Additionally, federal spending is allocated based on formulas that account for population, poverty rates, infrastructure needs, and other factors—not straightforward on how much tax a state paid in.
States like New Mexico and Mississippi receive more in federal spending than they pay in federal income taxes, while states like New Jersey and Connecticut pay more in federal taxes than they receive back in federal spending. This redistribution is intentional and reflects federal policy decisions about how to allocate resources across regions.
How the IRS tracks and reports state-level tax data
The Internal Revenue Service publishes data on federal income tax collected by state each year, usually with a lag of one to two years. This data comes from individual tax returns filed by residents and is organized by the state where the taxpayer lived when they filed. The IRS releases this information in reports called "Statistics of Income," which break down tax data by state, income level, and other categories.
You can find this data on the IRS website under their Statistics of Income section. The reports show total federal income tax collected, the number of returns filed, and average tax paid per return for each state. These reports are the official source for understanding how much federal income tax each state contributes.
Keep in mind that this data reflects where people lived when they filed their taxes, not where they earned their income. Someone who lives in one state but works in another is counted as a resident of the state where they filed. This can affect the numbers slightly, especially in states near major metropolitan areas that cross state lines.
Why high-income states do not always have the highest tax rates
It might seem logical that states paying the most federal income tax would also have the highest federal tax rates, but that is not how federal income tax works. Federal income tax rates are set by Congress and explore the same way to all residents of the United States, regardless of which state they live in. The tax brackets and rates are identical whether you live in California or Alaska.
What varies by state is state income tax, not federal income tax. Some high-income states like California and New York have high state income tax rates in addition to the federal tax. Other high-income states like Texas and Florida have no state income tax at all. The federal tax is the same; the state tax is what differs.
This is why a resident of Texas might pay less in total income tax than a resident of California earning the same amount, even though both pay identical federal income tax. The difference is in state taxes, not federal taxes.
Changes in state rankings over time
The ranking of states by federal income tax contribution has shifted over the past few decades, primarily due to population migration and economic growth. Texas has moved up significantly as its population has grown and its economy has expanded. Florida has also climbed the rankings as retirees and working-age residents have relocated there.
States like Illinois and Pennsylvania have held relatively steady or declined slightly in ranking as their populations have grown more slowly than the national average. The Northeast and Midwest, which were historically the centers of federal tax collection, have seen their share decline as population growth has shifted toward the South and Southwest.
These shifts reflect long-term demographic and economic trends rather than changes in tax policy. They show where people are choosing to live and work, which in turn determines where federal income tax is collected.
Frequently Asked Questions
Does a state that pays more federal taxes get more federal funding?
Not necessarily. Federal spending is allocated based on population, poverty rates, infrastructure needs, and other formulas, not on how much tax a state paid in. Some high-tax-paying states receive less federal spending per capita than they pay in taxes, while some lower-tax-paying states receive more.
Why does Texas pay so much federal income tax if it has no state income tax?
Federal income tax and state income tax are separate. Texas residents pay the same federal income tax as residents of other states, but they pay no state income tax. Texas ranks high in federal tax collection because of its large population and strong economy, not because of its state tax policy.
How do I find out how much federal tax my state paid last year?
The IRS publishes annual Statistics of Income reports that break down federal income tax by state. You can find these reports on the IRS website under their Statistics of Income section. The data is usually released one to two years after the tax year ends.
Can a state's federal tax ranking change significantly from year to year?
The top three states—California, Texas, and New York—have remained consistent for decades. States ranked four through ten can shift slightly based on economic conditions and population changes, but major shifts are rare. Significant changes usually take several years to show up in the rankings.
Do wealthy individuals in small states pay more federal tax per person than wealthy individuals in large states?
Federal income tax is calculated the same way for everyone based on income, not on which state they live in. A person earning $100,000 in Wyoming pays the same federal income tax as a person earning $100,000 in California. The difference in total state tax collection comes from population size and average income levels, not individual tax rates.