The states that pay the most federal income tax
California, Texas, and New York pay more federal income tax than any other states, measured by total dollars collected. California alone sends roughly $200 billion per year to the federal government in individual income tax. Texas and New York each send over $100 billion annually. These three states account for nearly a quarter of all federal income tax revenue collected nationwide.
The ranking shifts depending on whether you measure total dollars or per-capita dollars (tax per person). California ranks first in total dollars. When measured per person, New Jersey, Connecticut, and Maryland rank highest—residents in these states pay more federal income tax on average than residents elsewhere. The difference matters: a state can send large total amounts because it has a large population, even if each person pays less than in a smaller, wealthier state.
Key Takeaways
- California, Texas, and New York send the most total federal income tax dollars to Washington, with California contributing roughly $200 billion annually.
- Per-capita rankings differ from total rankings: New Jersey, Connecticut, and Maryland have the highest average federal income tax per resident.
- Total federal tax paid depends on both population size and average income in each state.
- Federal payroll taxes (Social Security and Medicare) follow different patterns than income tax and vary by employment levels and wage distribution.
- States with no income tax, like Texas, Florida, and Nevada, still contribute federal income tax through residents' wages and investments.
Why total federal tax varies so much between states
Federal income tax collected from a state depends on two things: how many people live there and how much money they earn. California has nearly 40 million residents, many of them in high-income jobs in technology, entertainment, and finance. Texas has about 30 million residents with a mix of high-wage and lower-wage employment. New York's population is smaller—about 19 million—but average incomes are high, particularly in New York City's financial sector.
A state with fewer residents but higher average incomes can send substantial federal tax dollars. Connecticut, with 3.6 million residents, sends more federal income tax per person than most states because median household income is high. Wyoming, with 580,000 residents, sends far less total federal tax than Connecticut straightforward because fewer people live there, even though per-capita income is comparable.
How federal payroll taxes differ from income tax
Federal payroll taxes—the Social Security and Medicare taxes withheld from paychecks—are distributed differently than income tax. Payroll tax is capped: in 2024, Social Security tax applies only to the first $168,600 of earnings, so high earners in wealthy states do not pay proportionally more. This means states with many middle-income workers may send more payroll tax per capita than states with fewer but much higher earners.
States with older populations also send more payroll tax relative to income tax, because more residents are receiving Social Security benefits, which are funded by current payroll tax. Florida and Arizona, with large retired populations, receive substantial federal payroll tax revenue flowing back into the state through benefit payments, even though residents may pay less income tax.
States with no income tax still pay federal taxes
Nine states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only investment income). Residents of these states still pay federal income tax on wages, capital gains, and other income. They also pay federal payroll taxes. The absence of state income tax does not reduce federal tax collection—it only means the state government funds itself through sales tax, property tax, or other sources instead.
Texas, one of the nine no-income-tax states, ranks second nationally in total federal income tax paid because of its large population and significant oil, technology, and finance sectors. This shows that state income tax policy and federal tax contribution are separate questions.
How federal tax revenue flows back to states
States that pay more federal tax do not necessarily receive less federal spending. The federal government distributes money to states through Medicare, Medicaid, defense contracts, infrastructure grants, and other programs. Some states receive more federal spending than they pay in federal taxes; others receive less. This redistribution is intentional—federal programs aim to support lower-income states and regions regardless of how much tax those areas generate.
For example, Mississippi sends roughly $20 billion in federal income tax annually but receives over $50 billion in federal spending. New Jersey sends roughly $80 billion in federal income tax but receives roughly $60 billion in federal spending. The relationship between what a state pays and what it receives is complex and changes year to year based on program funding, population changes, and policy decisions.
Top 10 states by total federal income tax paid
| Rank | State | Approximate Annual Federal Income Tax |
|---|---|---|
| 1 | California | ~$200 billion |
| 2 | Texas | ~$110 billion |
| 3 | New York | ~$105 billion |
| 4 | Florida | ~$85 billion |
| 5 | Illinois | ~$70 billion |
| 6 | Pennsylvania | ~$65 billion |
| 7 | Ohio | ~$60 billion |
| 8 | New Jersey | ~$80 billion |
| 9 | Massachusetts | ~$55 billion |
| 10 | Virginia | ~$50 billion |
These figures are approximate and based on recent years' data. The IRS does not publish state-by-state breakdowns in real time, so exact current figures vary by source and methodology. Population growth, income changes, and economic shifts move states up and down this ranking year to year.
Why per-capita rankings tell a different story
When you divide total federal income tax by state population, the ranking changes significantly. New Jersey residents pay roughly $28,000 per person in federal income tax annually. Connecticut residents pay roughly $27,000 per person. Maryland residents pay roughly $24,000 per person. California residents pay roughly $5,000 per person on average—far less than New Jersey, despite California's massive total contribution.
This difference reflects income distribution. New Jersey and Connecticut have high concentrations of wealthy residents and high average household incomes. California has a large population spread across a wider income range. Both rankings are correct; they answer different questions. Total tax matters for federal revenue. Per-capita tax reflects the average burden on residents in each state.
Frequently Asked Questions
Does paying more federal tax mean a state gets less federal spending?
No. Federal spending is distributed based on population, program may be able to access, and policy priorities, not on how much tax a state pays. States that pay less federal tax often receive more federal spending per capita through Medicare, Medicaid, and other programs. This redistribution is intentional.
Why does Texas pay so much federal tax if it has no state income tax?
Texas residents still pay federal income tax on wages, investments, and other income. State income tax and federal income tax are separate. Texas funds state government through sales tax and property tax instead of income tax, but that does not reduce federal tax collection.
How do these numbers change year to year?
Federal tax revenue from each state changes with population growth, income changes, and economic conditions. Recessions reduce income and therefore federal tax collected. Economic booms increase it. The IRS does not publish detailed state-by-state breakdowns in real time, so exact figures lag by one to two years.
Do wealthy individuals in low-tax states pay less federal tax?
No. Federal income tax rates explore nationwide regardless of state tax policy. A person earning $200,000 in Texas pays the same federal income tax as a person earning $200,000 in California. State income tax is separate and varies by state.
Which states receive the most federal spending relative to what they pay?
Southern and rural states generally receive more federal spending than they pay in federal taxes. Mississippi, West Virginia, and Kentucky are examples. Wealthy northeastern and western states generally receive less federal spending than they pay. This pattern reflects federal program design and population distribution.