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Top 1% Income Floor Varies Wildly by State
7 Oct
Summary
- National top 1% income floor is $748,000, but varies by state.
- Wage income is smaller share for top 1% than capital gains.
- Florida saw largest inflation-adjusted cutoff drop of 4%.
The income threshold for the top 1% of earners differs dramatically by location, according to newly released IRS data. Nationally, the floor is around $748,000 in adjusted gross income (AGI), but this figure plunges to $426,000 in West Virginia and soars to $1.1 million in Washington, D.C.
Income sources also diverge for the wealthiest. While wages constitute over 80% of income for those in the bottom half of earners, they represent only about 35% for the top 1%. Capital gains account for a significant 22% of top-1% income.
Florida saw a notable decrease, with its inflation-adjusted cutoff dropping 4% from the previous year, the largest decline nationwide. Despite this, its top 1% reported a substantial share of statewide AGI.
The average income for a top-1% filer nationally is much higher, around $2.3 million, illustrating the gap between entry-level and average earnings within this bracket. West Virginia has the lowest average top-1% income, below $1 million, though the gap between its entry and average income is still substantial.
Nationwide, the top 1% of tax returns, approximately 1.5 million, accounted for about 20.6% of all AGI in the past year. This share has seen a slight decrease from the prior year. Business income, while present, plays a smaller role compared to wages and capital gains for this income group.
