Worst states for income taxes? R.I. not so bad

PROVIDENCE – In a ranking of the 15 worst states for state income taxes, Rhode Island did not make the list, but two of its New England neighbors did – Maine and Massachusetts.
Instead, Rhode Island came in at No. 38 out of all 50 states, including the District of Columbia.
States were ranked by the effective income tax rate a person making the median income in that state could expect to pay, given a single filer with no dependents, who already filed a federal return and took the standard deduction available.
Based on data from the Tax Foundation last year, personal finance site GOBankingRates.com said Oregon rated the worst for income taxes, as federal taxes are deducted on a resident’s state return while other local income taxes might be added.
Oregon charges its median wage earner the highest rate, noting that a single filer making Oregon’s median income of $56,307 can expect to pay $3,930.88 in state income taxes, or 6.98 percent of his or her income, the website said.
In comparison, federal taxes are not deducted on the state return in Rhode Island, and no other local income taxes are added. A single filer earning Rhode Island’s median income of $57,812 will pay $1,725.45 in state income taxes, or 2.98 percent of his or her income.
Maine placed sixth on the list. Federal tax payments are not deducted on state returns in Maine, but residents are not subjected to additional local income taxes.
A single filer earning Maine’s median income of $50,121 annually can expect to pay $2,548.57 in state income taxes, or 5.08 percent of his or her income.
Massachusetts ranked 11th on the list, as all residents, regardless of how they file, owe a flat 5.20 percent of their taxable income to the state if they earn any money.
Federal tax payments are not deducted on the state return in Massachusetts, and no other local income taxes apply.
But a single filer earning Massachusetts’ median income of $62,963 can expect to pay $3,045.28, which would be 4.84 percent of his or her income.
With Oregon is at the top of the list of the 15 worst states for income taxes, the rest of the list is as follows: Hawaii, District of Columbia, Idaho, Minnesota, Maine, Virginia, Kentucky, Georgia, New York, Massachusetts, Illinois, Utah, North Carolina and Wisconsin.
Connecticut comes in at 29th as a single filer making Connecticut’s median income of $67,781 can expect to pay $2,507.96 in state income taxes, or 3.7 percent of his or her income.
Vermont ranked 32nd for single filers earning the median income of $54,842 paying $1,839.81 in state income taxes, or 3.35 percent of his income.
New Hampshire ranked 46th as there is no income tax except for income made on capital gains; as a result a single filer making the annual median income in New Hampshire of $71,322 can expect to pay nothing in state income taxes.
Wyoming ranked last on the list as residents do not have to pay state income taxes.
The website said that city- and county-level income taxes were not taken into account, and while deductions, exemptions and tax credits were all calculated as accurately as possible, it was not able to account for recent changes to tax law at the state level, inflation adjustments and cost of living adjustments.
What was considered: the rate associated with income bracket; standard deduction amount; personal exemption per filer; exemption per dependent; whether the state income tax is deducted based on net or gross income post federal filing; and whether local income taxes are applicable in each of the 50 states.

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1 COMMENT

  1. Based on a single filer filling out the short form.

    Massachusetts has all kinds of deductions for people not filling out long forms such as your rent and social security taxes but it doesn’t sound as if those and other deductions were taken into account.