Our tax map for middle-class families and related tax content includes data from a wide range of sources. To generate our rankings, we created a metric to compare the tax burden for a hypothetical middle-class family in all 50 states and the District of Columbia.
Kiplinger Tax Map
- ARTICLE: 10 Most Tax-Friendly States for Middle-Class Families
- ARTICLE: 10 Least Tax-Friendly States for Middle-Class Families
- MAP: State-by-State Guide to Taxes on Middle-Class Families
- RELATED: The Retiree Tax Map
Data Sources:
Income Taxes – Our income tax information comes from each state's tax agency. Income tax forms and instructions were also used. See more about how we calculated the income tax for our hypothetical family below under "Ranking method."
Property Taxes – The median property tax rate is based on the median property taxes paid and the median home value in each state for 2019 (the most recent year available). The data comes from the U.S. Census Bureau (opens in new tab).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail.
Sales Taxes – State sales tax rates are from each state's tax agency. We also cite the Tax Foundation's (opens in new tab) 2021 midyear average combined sales tax rate, which is a population-weighted average of state and local sales taxes. In states that let local governments add sales taxes, this gives an estimate of what most people in a given state actually pay, as those rates can vary widely.
Motor Fuel Taxes – The American Petroleum Institute prepares semi-annual reports (opens in new tab) of state motor fuel tax rates. We used July 2021 data but made several updates to reflect new rates effective since July 1, 2021. Values include excise taxes, sales taxes (when applicable) and a variety of fees that states impose.
Sin Taxes – Information about "sin taxes" on tobacco products, alcoholic beverages, and marijuana comes from a variety of sources, including state tax agencies, Federation of Tax Administrators (opens in new tab), Campaign for Tobacco-Free Kids (opens in new tab), and Distilled Spirits Council of the United States (opens in new tab).
Annual Car Taxes and Fees – We used information from state tax agencies and state motor vehicle departments for annual car taxes and fees.
Estate and Inheritance Taxes – Data from each state tax agency was used for estate and inheritance tax information.
Ranking Method:
The "tax-friendliness" of a state depends on the sum of income, sales and property taxes paid by our hypothetical middle-class family.
To determine the income tax component, we prepared tax returns for each state and the District of Columbia for a married couple with two dependent children, an earned income of $77,000, long-term capital gains of $1,500, qualified dividends of $1,000, and taxable interest of $500. They had $4,500 in state income taxes withheld from their wages. They also paid $3,000 in real estate taxes, paid $2,800 in mortgage interest, and donated $2,300 (cash and property) to charity. We calculated these 2020 returns using software from Credit Karma (opens in new tab) (some adjustments were made to account for certain 2021 tax law changes).
How much they paid in sales taxes was calculated using the sales tax deduction tables in the instructions for federal Schedule A (Form 1040) (opens in new tab) and the Tax Foundation's (opens in new tab) 2021 midyear average combined sales tax rates.
How much the hypothetical family paid (and deducted on their income tax return) in property taxes was calculated by assuming a residence with $300,000 assessed value and then applying each state's median property tax rate to that amount.
-
-
State "Stimulus Checks" Are a Thing in 2022 – Will You Get One?
To help counter high inflation, pandemic woes and other financial hardships, some states are sending tax rebate "stimulus" checks or other payments to residents.
-
How Young People Can Own Their Financial Future Authentically
It starts with trusting the process. The good news is Gen Zers and younger Millennials are on their way, a new study says.
-
Tax Breaks to Help You Pay for College
Paying for College Everyone knows education is pricey and getting pricier. But not everyone knows about the tax relief available at all stages.
-
Retirees, Make These Midyear Moves to Cut Next Year's Tax Bill
Tax Breaks Save money next April by making these six hot-as-July tax moves.
-
Estimated Payments or Withholding in Retirement? Here's Some Guidance
Budgeting You generally must pay taxes throughout the year on your retirement income. But it isn't always clear whether withholding or estimated tax payments is the best way to pay.
-
How to Cut Your 2021 Tax Bill
Tax Breaks Our guidance could help you claim a higher refund or reduce the amount you owe.
-
Why This Tax Filing Season Could Be Ugly
Coronavirus and Your Money National Taxpayer Advocate Erin M. Collins warns the agency will continue to struggle with tight budgets and backlogs. Her advice: File electronically!
-
Con Artists Target People Who Owe The IRS Money
Scams In one scheme, thieves will offer to "help" you pay back taxes, only to leave you on the hook for expensive fees in addition to the taxes.
-
Smart Money Moves to Make Before Year End
Financial Planning You can take action now to lower your taxes, save money and enhance your finances for 2022.
-
Cash-Rich States Lower Taxes
Tax Breaks The economic turnaround sparked a wave of cuts in state tax rates. But some say the efforts could backfire.
