State income tax saved in 2026 by two owners making the largest first-year contribution their age and income allow: a 52-year-old married S corporation owner who pays herself a $250,000 salary and has $250,000 of profit left over (a contribution of about $223,000), and a 45-year-old single consultant, a sole proprietor with $250,000 of net profit and eight years in business (about $156,000).
| State | S corporation, 52 | Sole proprietor, 45 |
|---|---|---|
| Oregon | $22,100 | $14,900 |
| California | $20,700 | $14,500 |
| District of Columbia | $20,600 | $13,300 |
| Minnesota | $20,100 | $12,100 |
| Vermont | $19,000 | $11,400 |
| Hawaii | $18,400 | $12,400 |
| Maine | $15,900 | $11,100 |
| Delaware | $14,700 | $10,300 |
| New York | $14,700 | $9,300 |
| New Jersey | $14,200 | Not deductible |
| Connecticut | $13,900 | $9,400 |
| Rhode Island | $13,400 | $7,700 |
| Virginia | $12,800 | $9,000 |
| Maryland | $12,800 | $8,200 |
| Montana | $12,600 | $8,800 |
| Wisconsin | $12,500 | $8,300 |
| New Mexico | $12,500 | $7,700 |
| Kansas | $12,400 | $8,700 |
| Idaho | $11,800 | $8,300 |
| South Carolina | $11,600 | $8,100 |
| Alabama | $11,200 | $7,800 |
| Massachusetts | $11,200 | Not deductible |
| Georgia | $11,100 | $7,800 |
| Illinois | $11,000 | $7,700 |
| Missouri | $10,500 | $7,300 |
| West Virginia | $10,200 | $7,100 |
| Nebraska | $10,100 | $7,100 |
| Oklahoma | $10,000 | $7,000 |
| Utah | $9,900 | $6,900 |
| Colorado | $9,800 | $6,900 |
| Michigan | $9,500 | $6,600 |
| Mississippi | $8,900 | $6,200 |
| North Carolina | $8,900 | $6,200 |
| Iowa | $8,500 | $5,900 |
| Arkansas | $8,300 | $5,800 |
| Kentucky | $7,800 | $5,500 |
| Pennsylvania | $6,800 | Not deductible |
| Louisiana | $6,700 | $4,700 |
| Indiana | $6,600 | $4,600 |
| Ohio | $6,100 | $4,300 |
| Arizona | $5,600 | $3,900 |
| North Dakota | $5,300 | $3,000 |
| Alaska | No income tax | No income tax |
| Florida | No income tax | No income tax |
| Nevada | No income tax | No income tax |
| New Hampshire | No income tax | No income tax |
| South Dakota | No income tax | No income tax |
| Tennessee | No income tax | No income tax |
| Texas | No income tax | No income tax |
| Washington | No income tax | No income tax |
| Wyoming | No income tax | No income tax |
Pennsylvania, New Jersey and Massachusetts do not follow the federal deduction for a self-employed owner's contributions. See states that tax retirement contributions. Local income taxes, such as New York City's, are left out, so residents of those places save more than shown.