Editor’s note: See related video above for five things to know about the IRS’s changes to taxes
(NEXSTAR) – It may seem like it takes a lot to be among the top 1% of earners in the U.S. That’s mostly true, considering less than 10% of all American households earn more than $200,000, Census Bureau data shows. But, a new analysis found it may be easier to break into the highest level of earners than others.
After reviewing available tax data from the IRS, and adjusting it with the Labor Department’s Consumer Price Index, SmartAsset calculated how much you’d need to earn to be amongst the highest earners in each state.
Overall, SmartAsset found the income threshold ranges from roughly $375,000 to slightly more than $955,000. Income thresholds to be in the top 1% in states stretching from the Plains south to the Gulf region and east along the Rust Belt were relatively lower than thresholds in states along the coasts and into New England.
Connecticut has the highest threshold in the U.S. at roughly $955,000. It was the only state with a minimum threshold above $900,000, with the next closest state being Massachusetts at roughly $897,000.
The states with the highest income thresholds are:
- Connecticut: $955,300
- Massachusetts: $896,900
- New Jersey: $825,965
- New York: $817,796
- California: $805,519
The state with the lowest threshold, according to SmartAsset’s findings, was West Virginia, where you need to earn about $374,700 to be in the highest 1%. Following West Virginia was Mississippi at $383,100.
The states with the lowest income thresholds are:
- West Virginia: $374,712
- Mississippi: $383,128
- New Mexico: $418,970
- Arkansas: $446,276
- Kentucky: $447,300
If landing among the top 1% of residents in your state seems like a stretch, SmartAsset also found how much you’d need to earn to land in the top 5% of each state.
While Connecticut has the highest threshold to land in the top 1%, it has the third-highest threshold to be in the top 5% at almost $337,000. Massachusetts has the highest rate, at $349,700. On the lower end, Mississippi had the lowest threshold to be in the top 5% at $181,100.
You can view the full study’s results here.
For some perspective, the average net worth – everything you own added up, minus any debt you have – of an American household was $748,800 in 2019, according to the Federal Reserve. But the average is driven up by a smaller number of very rich people toward the top of the spectrum. The median net worth, which gives a more accurate picture of a typical American household, is far lower at $121,700.
Federal data shows the average American household earns a median income of roughly $70,000.
Alix Martichoux contributed to this report.