DOGE Finds $155 Billion in Savings: Will Dividend Checks Follow?
The Department of Government Efficiency (DOGE) has identified $155 billion in savings since its establishment in January. In February, President Donald Trump hinted that 20% of these savings could be returned to Americans in the form of $5,000 checks.
Currently, it is up to Congress to determine if these checks will be issued.
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Learn More: How To Turn Your Tax Refund Into an Extra $1K This Year
If the DOGE checks are categorized as federal tax refunds, E-File suggests they would likely not be taxable. However, if classified as ordinary dividend checks, federal income tax could apply, along with potential state taxation. Below is an overview of various states’ positions regarding the taxation of these DOGE dividend checks.
All tax rates were obtained from TaxFoundation.org as of April 7, unless otherwise noted.
See more on DOGE’s latest cost-cutting measures.
State Tax Implications for DOGE Dividend Checks
Alabama
In Alabama, dividend checks would be deemed income and subject to an income tax rate ranging from 2% to 5% of the total amount received.
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Arizona
Arizona’s flat income tax rate is set at 2.5%; dividend checks would be subject to this rate.
Arkansas
In Arkansas, the income tax applies to dividend checks, with rates starting at 2% and reaching up to 3.9% based on total income.
California
Californians receiving dividend checks would incur an income tax that ranges from 1% to 12.3%, depending on total earnings.
Colorado
Colorado implements a flat income tax rate of 4.4%, which would apply to dividends received.
Connecticut
The state of Connecticut would classify these checks as income and tax them between 2% and 6.99% depending on overall earnings.
Delaware
In Delaware, dividend checks would also be taxed as income, with rates ranging from 3.9% to 6.6% based on total income.
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Georgia
Georgia taxes ordinary dividends as part of ordinary income, with a flat tax rate of 5.39% applied.
Hawaii
In Hawaii, dividend checks would be classified as income and taxed accordingly, with rates varying from 1.4% to 11%, plus additional fees based on income.
Idaho
Idaho has a flat income tax rate that applies to ordinary dividends received.
State Tax Rates on Dividend Checks Across the U.S.
Dividend checks are generally considered income and are subject to state income tax in many jurisdictions. Understanding each state’s tax implications can help taxpayers maximize returns. Below is a breakdown of how various states tax dividend income.
Illinois
Illinois imposes an income tax rate of 4.95%, applicable to dividend checks.
Indiana
Indiana features a flat income tax rate of 3%, straightforwardly applied to dividend checks.
Iowa
In Iowa, dividend checks are considered income and fall under the state’s income tax rate of 3.8%.
Kansas
Kansas taxes dividend income, with rates ranging from 5.2% to 5.58%, depending on individual circumstances.
Kentucky
Kentucky maintains a flat income tax rate of 4%, applied to dividend checks.
Louisiana
Louisiana’s tax treatment of dividends depends on classification. Dividends from the U.S. government are exempt from state income tax, while others may be taxed as ordinary income at rates from 1.85% to 4.25%.
Maine
Maine taxes dividend checks as income, with rates ranging from 5.8% to 7.15%, in addition to possible fees.
Maryland
Maryland treats dividend checks as income, applying a tax rate between 4.75% and 5.75%, along with potential additional fees.
Massachusetts
In Massachusetts, dividend checks are considered income and subject to a 5% income tax rate.
Michigan
Michigan includes ordinary dividends as part of income, applying a tax rate of 4.25%.
Minnesota
In Minnesota, the tax on dividend checks varies between 5.35% and 9.85%, depending on the taxpayer’s bracket.
Mississippi
In Mississippi, dividend checks are taxed at a flat rate of 4.4%.
Missouri
Dividend checks in Missouri are subject to a state income tax rate ranging from 3% to 4.7%.
Montana
In Montana, dividend checks are taxed at a state income tax rate that ranges from 4.7% to 5.9%.
For more information, read about: 8 States to Move to If You Don’t Want to Pay Taxes on Social Security.
Understanding Dividend Tax Rates Across U.S. States
Nebraska
Nebraska taxes dividend checks as income, applying a tax rate that ranges from 2.46% to 5.2%.
New Jersey
In New Jersey, dividend checks fall under the state income tax, which spans between 1.4% and 10.75%.
New Mexico
Dividend checks in New Mexico are taxed as income, with rates from 1.5% to 5.9%.
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New York
New York includes ordinary dividends in total income, subjecting them to income tax rates ranging from 4% to 10.9%.
North Carolina
North Carolina regards ordinary dividends as income, which incurs a flat income tax rate of 4.25%.
North Dakota
In North Dakota, dividends are also taxed as income, with rates fluctuating between 1.95% and 2.5%.
Ohio
Dividend checks in Ohio are considered income, with an income tax that varies from 2.75% to 3.5% based on overall earnings.
Oklahoma
Oklahoma imposes a state income tax on dividend checks that ranges from 0.25% to 4.75%.
Find out: How Much Your State Collects on Every Type of Tax
Oregon
In Oregon, dividend checks are subject to the state income tax, which varies between 6.75% and 9.9%.
Pennsylvania
Pennsylvania considers dividends as income, taxing them at a rate of 3.07%.
Rhode Island
Rhode Island classifies dividend checks as income, which falls under a graduated income tax system ranging from 3.75% to 5.99%.
South Carolina
In South Carolina, income over $3,650 is taxed at 3%, escalating to a maximum of 6.2%. Dividend checks are included in this tax structure.
Utah
Dividend checks in Utah are subject to a state income tax of 4.55%.
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Understanding State Taxes on Dividend Checks in the U.S.
Vermont
In Vermont, dividend checks are subject to state income tax rates that range from 3.35% to 8.75%.
Virginia
Dividends are treated as income in Virginia. For example, a $5,000 check would incur state income tax rates between 5% and 5.75%.
West Virginia
In West Virginia, the state income tax rate applies to dividend checks, which varies from 2.22% to 4.82%.
Wisconsin
Wisconsin classifies dividend checks as income, and they will be taxed at rates from 3.5% to 7.65%.
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This article originally appeared on GOBankingRates.com: 41 States That Would Tax Musk’s DOGE Dividend Check.
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