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5 States Where Taxpayers Will Save the Most Money on Taxes in 2026
Yahoo Financeยท 2025-10-30 13:00
Core Insights - Millions of Americans will see tax savings for the 2025 tax season due to the provisions of the Big Beautiful Bill Act (OBBBA), which made many aspects of the 2017 Tax Cuts and Jobs Act (TCJA) permanent and introduced new tax deductions and credits for households [1] Tax Savings by Income Group - Working-class families earning between $15,000 and $30,000 will experience a 21% tax cut, the largest reduction among all income groups [2] State-Specific Tax Savings - Taxpayers in different states will experience varying levels of tax savings, with some states projected to save significantly more than others [3] California - California taxpayers are expected to save an average of $2,293.15 annually, primarily due to estate and gift tax breaks, averaging $898 per return, potentially saving over $3.2 million per estate [4] - The State and Local Tax (SALT) deduction is significant, with about 15% of Californians itemizing their returns, leading to average savings exceeding $5,200. Seniors benefit from an average savings of $1,386 with a new $6,000 senior deduction, and over 6.6 million qualifying children are eligible for the Child Tax Credit (CTC) [5] Oregon - Oregon taxpayers are projected to save an average of $2,226.61 annually, with estate and gift tax benefits averaging about $963 per return, allowing estates to save upwards of $2.5 million [6] - Approximately 13% of Oregonians itemize their returns, resulting in average tax savings exceeding $5,500. Seniors, making up about 20% of the population, could save over $1,100 on average with the new senior deduction, and there are over 670,000 qualifying children eligible for the CTC [7] Massachusetts - Massachusetts ranks third, with taxpayers saving an average of $2,150.45 annually, driven largely by estate and gift tax savings, which average about $921 per return, with individual estates saving more than $2.3 million [8]