Washington Pays the 10th Most Federal Tax in the United States… See Where It Comes From

Written by Jennifer Geer
Published: February 27, 2024
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How much federal tax does Washington pay? You can learn a lot about the financial health of a state based on the state’s dependence on federal aid. All states send money to the federal government in the form of taxes. This includes individual income tax, business income tax, and estate taxes, among others. States with a higher GDP pay more money to the federal government. And wealthier states get less money back in the form of federal aid.

Washington is in the top ten states paying the most federal tax in the United States. It also gets less money back for funding than it pays out. Where does the money come from? Let’s take a look.

How Much Does Washington Pay in Federal Tax?

Sticky note with the handwritten text TAX RETURN placed on Income Tax Return filing form. Selective focus on the text.

Washington pays the tenth most federal tax in the U.S.

©Linaimages/Shutterstock.com

Washington paid $148,466,475 in federal tax dollars in 2023. Interestingly, Washington is one of the states that doesn’t have a personal income tax. However, Washington makes up for it in sales and fuel taxes, which are some of the highest in the country.

But what does Washington pay in federal tax? Take a look at the summary table below, using data from the IRS, to see it broken down.

Summary of Washington Federal Taxes Paid

TaxAmount
Individual income tax withheld and FICA tax$96,386,231
Individual income tax payments and SECA tax$32,111,707
Unemployment insurance tax$262,680
Railroad retirement tax$12,484
Estate and trust income tax$1,104,035
Estate tax$788,263
Gift tax$356,465
Excise taxes$1,706,749
Business income taxes$15,737,862
Total Collections$148,466,475

As you can see from the table, Washington residents pay the most taxes in the form of individual income tax and FICA tax. Over $96 million of the total $148 million tax dollars are spent on this tax. FICA is a payroll tax deducted from each person’s paycheck. It’s paid by the individual earning income and by the employer.

The next on the list are individual income tax payments and SECA tax. SECA is similar to FICA, but it’s for self-employed individuals. Self-employed people pay the employee and employer-paid portion of this tax. However, the employer-paid portion is deductible as a business expense.

What Are the Other States in the Top Ten?

Welcome to California road sign

California pays the most in federal taxes than any other state.

©U. Eisenlohr/Shutterstock.com

Washington is one of ten states that pay the most in federal taxes. These states have strong economies, and large populations, and are less dependent on the federal government than other states. They include:

  1. California — $696 million
  2. Texas — $400 million
  3. New York — $393 million
  4. Florida — $321 million
  5. Illinois — $223 million
  6. Ohio — $188 million
  7. New Jersey — $186 million
  8. Pennsylvania — $177 million
  9. Massachusetts — $169 million
  10. Washington — $148 million

These states have some of the highest household incomes in the country, and therefore, pay more in federal taxes. However, states that are well off financially tend to not need to qualify for as much federal aid as other places. Therefore, some states have a lower return on their taxes. Meaning they pay more than they get back. States with fewer residents or residents that earn less money pay much less in federal taxes.

How Dependent is Washington on Federal Funding?

Washington is one of the least dependent states in the nation on federal aid. The state receives $0.63 for every tax dollar it pays. In contrast, the state that receives the most federal funding is New Mexico ($3.69 return on tax dollars). New Mexico’s funding in part is due to its four military bases and two national laboratories. Delaware is the least reliant, getting just a $0.32 return on tax dollars.

Washington pays higher federal taxes and receives less federal funding than other states, thanks to its overall prosperity and strong economy. In fact, the state was ranked second overall by U.S. News & World Report’s 2023 Best States rankings. Meanwhile, WalletHub ranked Washington’s economy as the best in the nation.

Washington Ranks 4th in the Nation for Annual Income

Space Needle and Seattle downtown skyline panorama from Kerry Park on a cloudy day.

Seattle is home to large companies such as Amazon and Microsoft.

©iStock.com/Songquan Deng

Another reason for Washington’s high federal taxes is the high income among its residents. Washington also has the fourth average yearly income in the nation. Washington’s annual average pay is $72,350 compared to the nation overall which is $59,428. Washington is only behind Massachusetts, New York, and California in terms of average income.

Conclusion

Although Washington pays a hefty share of the nation’s federal taxes, its robust economy means that residents of Washington have higher average salaries than other parts of the country. This is due in part to Seattle’s role as a hotspot for tech companies. Seattle is home to Microsoft, Amazon, and many other startups. Its strong financial position means it gets less federal funding than other states.

The photo featured at the top of this post is © Pung/Shutterstock.com


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About the Author

Jennifer Geer is a writer at A-Z Animals where her primary focus is on animals, news topics, travel, and weather. Jennifer holds a Master's Degree from the University of Tulsa, and she has been researching and writing about news topics and animals for over four years. A resident of Illinois, Jennifer enjoys hiking, gardening, and caring for her three pugs.

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