The states with the highest income levels aren't the ones you'd think
New Study: This State Has the Highest Income Levels—See How Yours Ranks
Updated on Jun. 16, 2025
We’ve all longed for a little more money in our paychecks. If we’re living in a high-earning area, we may have even wondered how our state stacks up in annual income.
WalletHub recently analyzed just that, looking into all 50 states and the District of Columbia to determine which state has the highest annual income, when considering its median income in context.
Across the United States as a whole, the median yearly income is $81,000, according to the latest data from the Federal Reserve. That may not sound so bad, but many Americans on the lower end of the scale are struggling.
So how does your state measure up in annual income, according to the new findings? Read on to find out which states rank highest (and lowest) in annual income—and what that means for your overall finances.
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How were the highest incomes determined?
To pinpoint the state with the highest income, WalletHub examined all 50 states and Washington, DC, considering three key metrics that measure income for different population segments and then adjusted for cost of living index (COLI). Here are these metrics, along with their weights:
- Average annual income for the top 5% (double weight, 50 points)
- Median annual household income (full weight, 25 points)
- Average annual income of the bottom 20% (full weight, 25 points)
The data was collected from the U.S. Census Bureau and Council for Community and Economic Research and is valid as of May 6, 2025.
The researchers uncovered income disparities within and between the states. After adjusting for the COLI, the median income in the highest state is more than three times that of the lowest state. And surprisingly, the state with the lowest income is actually the most affordable state—primarily because of reasonable housing costs.
“The share of income going to the top 1% has approximately doubled over the last 50 years, and people want to identify a primary cause for this rising inequality,” explains Tyler Schipper, PhD, associate professor of economics at the University of St. Thomas in St. Paul, Minnesota. Access to higher education and tax codes play a part, and the pandemic further tipped the scales, he adds.
What state has the highest income?
Virginia has the highest income in the WalletHub calculations. Its median income is $93,275 (adjusted for COLI), and Old Dominion’s top 5% of earners make an average of $533,522 per year.
You’d think these high incomes would lead to higher housing costs, but Virginia is in good shape there. According to Redfin data as of March 2025, Virginia ranks 16th among the most expensive housing markets, with a median sales price for a home of $425,600.
While Virginia’s median income only ranks 17, it tops the WalletHub report because the top 5% is the third-highest and the bottom 20%, at $19,293, is fourth-highest in the nation. So Virginia residents at all income levels are doing well compared with peers in other states.
What are the pros of living in a high-income state?
When you live in a state with a higher median income, you have more people contributing to create a strong tax base. A stronger tax base leads to well-funded public schools and solid infrastructure, which includes amenities such as roads, libraries, parks, public transportation and emergency services.
Other perks include access to better health care, cultural perks like museums and entertainment, and higher home values. Healthy home values matter because it means real estate is a potentially lucrative investment.
Are there any cons of living in a high-income state?
A higher quality of life for some people doesn’t make a place the most livable for everyone. Everything—and we mean everything—costs more in a high-income state. Money disappears quickly after allocating funds to rising housing costs, groceries, child care, insurance and even your gym membership.
Affordability is a big factor. Even though states with a lower median income might lack some services—Montana doesn’t plow roads the way Massachusetts does, despite receiving much more snowfall—these states also have a lower cost of living, making them a good long-term option for people who may not have as much in their retirement account.
How do the states rank for income levels?
These are the states ranked highest to lowest in income, after balancing median annual income and the top 5% and lowest 20% average annual incomes (all numbers are after COLI adjustments):
1. Virginia
Top 5% average income: $533,522
Median income: $93,275
Bottom 20% average income: $19,293
2. New Jersey
Top 5% average income: $522,128
Median income: $122,447
Bottom 20% average income: $17,083
3. New York
Top 5% average income: $575,505
Median income: $95,033
Bottom 20%: $13,647
4 . Connecticut
Top 5% average income: $535,578
Median income: $118,346
Bottom 20%: $15,005
5. Washington
Top 5% average income: $499,994
Median income: $109,171
Bottom 20%: $18,777
6. Utah
Top 5% average income: $466,144
Median income: $95,101
Bottom 20%: $23,531
7. Minnesota
Top 5% average income: $486,764
Median income: $89,434
Bottom 20% average income: $20,616
8. Colorado
Top 5% average income: $483,844
Median income: $102,825
Bottom 20% average income: $19,253
9. Illinois
Top 5% average income: $521,989
Median income: $81,549
Bottom 20% average income: $16,705
10. Massachusetts
Top 5% average income: $486,112
Median income: $133,946
Bottom 20% average income: $14,221
11. Texas
Top 5% average income: $504,383
Median income: $73,718
Bottom 20% average income: $17,461
12. California
Top 5% average income: $473,848
Median income: $129,884
Bottom 20% average income: $14,542
13. District of Columbia
Top 5% average income: $470,987
Median income: $169,153
Bottom 20% average income: $9,768
14. Georgia
Top 5% average income: $504,969
Median income: $69,815
Bottom 20% average income: $16,968
15. Maryland
Top 5% average income: $438,921
Median income: $128,496
Bottom 20% average income: $17,012
16. Florida
Top 5% average income: $492,920
Median income: $72,684
Bottom 20% average income: $16,097
17. New Hampshire
Top 5% average income: $417,276
Median income: $116,255
Bottom 20% average income: $18,973
18. Pennsylvania
Top 5% average income: $464,388
Median income: $77,581
Bottom 20% average income: $16,288
19. Missouri
Top 5% average income: $464,577
Median income: $62,391
Bottom 20% average income: $17,561
20. North Carolina
Top 5% average income: $468,634
Median income: $66,565
Bottom 20% average income: $16,532
21. Arizona
Top 5% average income: $450,383
Median income: $78,746
Bottom 20% average income: $17,190
22. Michigan
Top 5% average income: $460,674
Median income: $64,806
Bottom 20% average income: $17,466
23. Idaho
Top 5% average income: $432,492
Median income: $74,521
Bottom 20% average income: $19,578
24. Tennessee
Top 5% average income: $471,725
Median income: $61,902
Bottom 20% average income: $16,337
25. Nebraska
Top 5% average income: $443,531
Median income: $75,610
Bottom 20% average income: $17,942
26. Delaware
Top 5% average income: $422,916
Median income: $90,873
Bottom 20% average income: $18,056
27. Ohio
Top 5% average income: $455,092
Median income: $64,455
Bottom 20% average income: $16,713
28. Kansas
Top 5% average income: $432,887
Median income: $71,329
Bottom 20% average income: $17,814
29. Wisconsin
Top 5% average income: $418,059
Median income: $75,780
Bottom 20% average income: $18,615
30. Iowa
Top 5% average income: $414,953
Median income: $71,552
Bottom 20% average income: $18,358
31. South Dakota
Top 5% average income: $415,926
Median income: $72,189
Bottom 20% average income: $17,891
32. Nevada
Top 5% average income: $419,998
Median income: $84,612
Bottom 20% average income: $15,203
33. Indiana
Top 5% average income: $415,138
Median income: $66,989
Bottom 20% average income: $17,275
34. North Dakota
Top 5% average income: $405,631
Median income: $81,960
Bottom 20% average income: $16,237
35. Montana
Top 5% average income: $413,616
Median income: $72,701
Bottom 20% average income: $16,110
36. South Carolina
Top 5% average income: $433,153
Median income: $66,038
Bottom 20% average income: $14,588
37. Oregon
Top 5% average income: $396,956
Median income: $95,357
Bottom 20% average income: $15,145
38. Hawaii
Top 5% average income: $352,749
Median income: $146,646
Bottom 20% average income: $14,199
39. Wyoming
Top 5% average income: $396,773
Median income: $78,702
Bottom 20% average income: $16,453
40. Oklahoma
Top 5% average income: $418,392
Median income: $59,284
Bottom 20% average income: $15,438
41. Kentucky
Top 5% average income: $427,286
Median income: $57,716
Bottom 20% average income: $14,105
42. Arkansas
Top 5% average income: $426,569
Median income: $53,166
Bottom 20% average income: $14,420
43. Rhode Island
Top 5% average income: $373,461
Median income: $110,458
Bottom 20% average income: $13,352
44. Alaska
Top 5% average income: $337,921
Median income: $117,767
Bottom 20% average income: $16,183
45. Alabama
Top 5% average income: $412,305
Median income: $57,774
Bottom 20% average income: $13,818
46. Vermont
Top 5% average income: $358,688
Median income: $94,544
Bottom 20% average income: $15,052
47. Maine
Top 5% average income: $358,542
Median income: $83,800
Bottom 20% average income: $14,540
48. Louisiana
Top 5% average income: $405,592
Median income: $58,352
Bottom 20% average income: $11,733
49. Mississippi
Top 5% average income: $391,715
Median income: $48,630
Bottom 20% average income: $12,515
50. New Mexico
Top 5% average income: $371,006
Median income: $62,464
Bottom 20% average income: $12,351
51. West Virginia
Top 5% average income: $357,430
Median income: $55,201
Bottom 20% average income: $12,940
Why are these study findings important?
One goal of this report was to uncover states with big income disparities. “By measuring the income of various percentiles against a state’s median income,” explains Chip Lupo, a WalletHub analyst, “we can better identify where income disparities are more prevalent, which could help us better understand why residents of certain states struggle more to make ends meet.”
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About the experts
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Sources:
- Tyler Schipper, PhD, associate professor of economics at the University of St. Thomas
- Marc Fusaro, PhD, dean at DeVille School of Business and associate professor of Economics at Walsh University
- Chip Lupo, WalletHub analyst
- WalletHub: “Best & Worst State Economies (2025)”
- WalletHub: “States Where People Have the Highest Income (2025)”
- Federal Reserve Bank of St. Louis: “Real Median Household Income in the United States”
- Redfin: “The 10 Most Expensive States to Buy a House in the U.S., Ranked”
