What to Know
- A recent study published by WalletHub revealed some tax-related information that comes as no surprise to tri-state residents.
- New York, New Jersey and Connecticut are among the top 10 states with the highest tax rates, according to WalletHub.
- Overall, Connecticut ranked second highest tax rate with New York placing behind it for third and New Jersey coming last on the top ten list.
Tax season is here!
A recent study published by WalletHub revealed some tax-related information that comes as no surprise to tri-state residents: New York, New Jersey and Connecticut are among the top 10 states with the highest tax rates.
Overall, according to WalletHub, Connecticut ranked as the state with the second highest tax rate with New York placing behind in the third spot and New Jersey coming last on the top 10 list.
The effective total state and local tax rates on the median U.S. household in Connecticut added to 14.85%, 14.08% in New York and 12.84% in New Jersey, the WalletHub study revealed. Annually, that translates to a median total of $9,385 in Connecticut, $8,900 in New York and $8,117 in New Jersey.
According to WalletHub, “Median U.S. Household” translates to: "an annual income of $63,218 (mean third quintile U.S. income); owns a home valued at $217,500 (median U.S. home value); owns a car valued at $25,295 (the highest-selling car of 2021); and spends annually an amount equal to the spending of a household earning the median U.S. income."
Overall, WalletHub notes that "taxpayers in the most tax-expensive states, for instance, pay three times more than those in the cheapest states."
Not only is the tri-state area among the highest for tax rates, it also ranks among the highest for the overall cost of living, with Connecticut taking the lead in 1st place, followed by New York in 2nd and New Jersey in 4th place, according to WalletHub.
U.S. taxpayers have until April 18 to file their federal tax returns. Since the season began in Jan. 24, the IRS has already issued out 30 million tax refunds.
Aside from the overall tax rate, the WalletHub study also found that New Jersey had the 5th highest gas tax rate (placing 47 out of 51 states). Additionally, both Connecticut and New York are tied in 2nd place as among the states with the highest state cigarette tax rates for a pack of 20 cigarettes.
To view the complete study, or to see the methodology used, click here.
FAQs
A financial advisor can help you with all of your tax planning needs. With a top income tax rate of 6.99%, Connecticut has a higher rate than some of its neighboring states, such as Massachusetts' flat rate of 5% income tax no matter what you earn, but it's low in comparison to New York state's top rate of 10.9%.
What 10 states have the highest taxes? ›
Based on research by the Tax Foundation as of 1 July 2023 the highest average combined state and local sales tax rates are in Tennessee (9.548%), Louisiana (9.547%), Arkansas (9.443%), Washington (9.397%), Alabama (9.237%), Oklahoma (8.986%), California (8.851%), Illinois (8.838%), Kansas (8.750%) and New York (8.532%) ...
Does New Jersey have the highest taxes in the United States? ›
According to personal finance website WalletHub, New Jersey has the highest real estate tax rate in the nation. With some of the highest median home values in the country, this makes New Jersey the most expensive state for property taxes.
Which state has higher income tax, NY or NJ? ›
The answer is that New York imposes a higher effective tax rate. There are two reasons. First, New York's marginal rates are higher for incomes up to about $500,000, especially for incomes lower than about $150,000.
Are taxes lower in CT or NJ? ›
Maine: 11.14% Vermont: 10.28% Connecticut: 9.83% New Jersey: 9.76%
What is the tax rate in NJ? ›
New Jersey has a graduated corporate income tax, with rates ranging from 6.5 percent to 9.0 percent. New Jersey also has a 6.625 percent state sales tax rate and an average combined state and local sales tax rate of 6.60 percent. New Jersey has a 2.08 percent effective property tax rate on owner-occupied housing value.
Which 10 states have the highest sales tax rate? ›
10 States With the Highest Sales Taxes
- Arkansas sales tax.
- Washington sales tax. ...
- Alabama sales tax. ...
- Oklahoma Sales Tax. ...
- Illinois sales tax. Statewide sales tax: 6.25% ...
- 8. California sales tax. Statewide sales tax: 7.25% ...
- Kansas sales tax. Statewide sales tax: 6.5% ...
- New York sales tax. Statewide sales tax: 4% ...
New York has the highest overall tax burden, while Alaska has the lowest. Maine has the highest property tax burden, while Alabama has the lowest. California has the highest individual income tax burden, while seven states (including Texas, Florida and Washington) have the lowest.
At what age do you stop paying property taxes in NJ? ›
You (or your spouse/civil union partner) were: 65 or older as of December 31, 2022; or. Actually receiving federal Social Security disability benefit payments (not benefit payments received on behalf of someone else) on or before December 31, 2022, and on or before December 31, 2023.
Is NJ sales tax higher than NY? ›
New York has a sales tax of 8.875% while New Jersey has a sales tax of 6.625%. If you shop in an area that is designated as an Urban Enterprise Zone, you will only have to pay half the standard sales tax rate. You're saving money while you shop!
NJ vs.
In Florida there is no income tax (compared to New Jersey's income tax rates which can get as high as 10.75%. Neither New Jersey nor Florida charges an inheritance or estate tax as long as certain conditions are met.
Does CT have higher taxes than NY? ›
New York law requires workers to pay income taxes in the state where their employer is located, and New York's tax rates tend to be higher than Connecticut's.
Does CT have high income tax? ›
Connecticut Tax Rates, Collections, and Burdens
Connecticut has a graduated state individual income tax, with rates ranging from 2.00 percent to 6.99 percent. Connecticut has a 7.5 percent corporate income tax rate. Connecticut also has a 6.35 percent state sales tax rate and does not have local sales taxes.
Is it cheaper to live in Connecticut or New Jersey? ›
Not only is the tri-state area among the highest for tax rates, it also ranks among the highest for the overall cost of living, with Connecticut taking the lead in 1st place, followed by New York in 2nd and New Jersey in 4th place, according to WalletHub.
Is it cheaper to live in NY or CT? ›
Cost of Living in New York vs. Connecticut? The cost of living in New York state is significantly higher than the national average. The median home cost is $373,000 compared to the U.S. average of $291,700, but it's not that much higher than the Connecticut average of $318,400.
Does CT have the highest property taxes? ›
Real estate data firm Attom ranked Connecticut as having the third highest property taxes on average in the United States, trailing only Illinois and New Jersey, and with New York ranked fourth.
Are income taxes high in Connecticut? ›
Connecticut has some of the highest average income taxes and median property taxes in the country, as well as above average sales taxes. But there are no extra income taxes or sales taxes levied at the local level in the state.
Is Connecticut richer than New York? ›
Despite having the second-highest state and local tax burden, according to the Tax Foundation, behind only New York, Connecticut was tops among the states in disposable personal income from 1987 through 2019 and was No. 2 to Massachusetts in 2022, just as in the pretax numbers.
