IRS Reported New Income Thresholds for Top 1 Percent

New data shows you needed $748,000 in income to reach the top 1% of earners during the 2023 tax year.

Updated on Oct. 10, 2026 in Taxes

IRS Reported New Income Thresholds for Top 1 Percent

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Do you feel the income threshold for the top 1% reflects your actual cost of living?

The IRS released Statistics of Income data in August 2026 detailing tax return distributions for 2023. This report identifies that the national income threshold required to join the top 1% of tax filers reached $748,000.

Why it matters

While the threshold for the top 1% rose by 1% from 2022 to 2023, consumer prices climbed by roughly 4% during that same period. This discrepancy resulted in a 3% inflation-adjusted decline in the real-dollar threshold required to qualify as a top-tier earner.

The national top 1% threshold is $748,000, while state-level figures vary from $1.1 million in Washington, D.C., to $426,000 in West Virginia. Nationally, 1.5 million tax returns accounted for 20.6% of all adjusted gross income reported in 2023.

The players

Internal Revenue Service

The federal agency responsible for tax administration, revenue collection, and the publication of annual income statistics.

The details

The IRS determines these brackets by processing all filed tax returns through its Statistics of Income program. For those in the top 1%, wages and salaries make up 35% of their total adjusted gross income, while net capital gains contribute an additional 22%. Because the income threshold rose more slowly than inflation, the relative value of the earnings required to hit this benchmark effectively decreased compared to the prior year.

2023: Income thresholds and tax return distributions were recorded.
August 2026: The IRS released the Statistics of Income data.

Money Landscape

This data release follows the standard reporting cycle of the IRS Statistics of Income program. It confirms a trend where income thresholds for top earners failed to keep pace with the 4% increase in consumer prices recorded during the 2023 tax year.

If you are reviewing your financial position relative to these benchmarks, consider how inflation impacts your purchasing power rather than just your nominal income. Speak with a qualified tax professional to understand how your specific income mix—such as wages versus capital gains—affects your tax liability.

The takeaway

The gap between threshold growth and inflation highlights how rising costs can influence the statistical distribution of income. Review your own income composition and tax documentation with a qualified financial or tax professional to assess your household budget against national trends.