5 States Where Taxpayers Will Save the Most Money on Taxes in 2026

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Millions of Americans can expect to see some tax savings for the 2025 tax season, which will last through 2028 and beyond. President Donald Trump’s Big Beautiful Bill Act (OBBBA) made many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) permanent and added an array of new tax deductions and credits for households.

According to the House Committee on Ways & Means, working-class families making between $15,000 and $30,000 will see their taxes cut by 21% — the largest of any income group.

But not every state will benefit equally. A new SmartAsset analysis shows that taxpayers in some states will end up with much bigger savings than others. Find out which ones below.

California

• Total expected value: $2,293.15

Only five states are projected to save over $2,000 annually and California is at the top of the list. A big reason is the break on estate and gift taxes, which works out to about $898 per return on average and can mean more than $3.2 million in savings per estate.

The State and Local Tax deduction (SALT) is another big factor. About 15% of Californians itemize their returns and for those households, the average savings tops $5,200. Seniors also benefit, saving an average of $1,386 with the new $6,000 senior deduction. Younger households could also benefit from the child tax credit (CTC), with over 6.6 million qualifying children statewide.

Oregon

• Total expected value: $2,226.61

Oregon comes in just behind California, with average annual savings of more than $2,200. Much of that benefit is tied to estate and gift taxes, where returns see an average value of about $963 and estates can save upwards of $2.5 million.

The SALT deduction also plays a role, especially for the nearly 13% of Oregonians who itemize their returns. For those households, the average tax savings top $5,500 per return. Seniors, who make up about 20% of the population, could save over $1,100 on average with the new senior deduction. There are also more than 670,000 qualifying children statewide who are eligible for the CTC.

Massachusetts

• Total expected value: $2,150.45

Massachusetts ranks third, with taxpayers saving an average of just over $2,100 per year under the Better Business Bureau (BBB). Again, one of the biggest drivers is the estate and gift tax, which has an expected value of about $921 per return, with individual estates saving more than $2.3 million on average.

For the 12% of residents who itemize, the SALT deduction helps taxpayers average more than $5,500 per return. Seniors, who make up nearly 19% of the state’s population, see an average savings of around $1,111 from the new $6,000 senior deduction. Families also benefit, with more than 1 million children across The Bay State who are eligible for the CTC.

Connecticut

• Total expected value: $2,125.21

Connecticut taxpayers will see an average annual savings of $2,125. Because of the state’s high concentration of wealth, the estate and gift tax is projected to save estates an average of $2.7 million each and contribute nearly $872 per return in expected value.

Not everyone benefits from itemizing, but for the 11% of households that do, the SALT deduction makes a difference, averaging almost $5,500 per return. Seniors, who account for about 19% of Connecticut’s population, see average savings of $1,386 under the new deduction and for families, the CTC supports more than 567,000 children.

Hawaii

• Total expected value: $2,077.91

Residents in Hawaii are projected to save nearly $2,100 a year under the BBB. The estate and gift tax is expected to deliver a value of about $707 per return, with estates saving an average of $2.4 million.

The SALT deduction also carries weight, particularly for the 12% of residents who itemize, averaging more than $5,500 in savings per return. Seniors, who make up more than 21% of Hawaii’s population, save about $1,388 each under the new senior deduction. More than 235,000 children statewide are also eligible for the CTC.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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