Achieving a spot in the top 1% in America varies depending on which state you live in, according to a recent study.
In some states, Americans need to earn more than $1 million annually to be a part of the top 1%. In other states, they can earn less than $500,000 to earn that distinction, the study suggests.
GoBankingRates analyzed IRS data from the 2021 tax year—the most recent available—and adjusted the figures for 2024 dollars to determine the income needed to be in the top 1% in each state. In five states—Connecticut, Massachusetts, California, Washington, and New Jersey—individuals must earn over $1 million to qualify as part of the top 1% of earners.
According to the study, only three states—New Mexico, Mississippi, and West Virginia—require less than $500,000 in annual income to be part of the top 1%.
Interestingly, the Northeast surpasses the West Coast in income thresholds for the top 1%, with Massachusetts and Connecticut ranking higher than California, GoBankingRates noted.
What is the ‘top 1%?’
The term “top 1%” typically refers to the highest-earning individuals within a population, based on income or net worth.
According to 2021 data from the Economic Policy Institute (EPI), the average annual income for those in the top 1% in the U.S. was $819,324. Within that group, the top 0.1% earned an even more substantial average of $3,312,693 per year. In contrast, the bottom 90% of earners had an average annual income of just $36,571, highlighting the stark gap in income distribution.
