Most & Least Federally Dependent States (2026)

States receive federal aid for a wide range of reasons, from disaster relief and public health emergencies to investments in education, transportation, infrastructure, healthcare, and more. While some states receive significantly more aid than others, the total dollar amount alone doesn’t tell the full story. To better understand the impact of this funding, it’s important to put it in context such as by examining what share of a state’s overall revenue it represents and how much the federal government recoups through taxes paid by the state’s residents.

To assess how federal dependence varies across the country, WalletHub compared all 50 states using three key metrics: the return on federal taxes paid, the share of federal jobs, and federal funding as a percentage of state revenue.

“Regardless of whether the distribution of federal funds is fair or not, living in one of the most federally dependent states can be beneficial for residents. For every dollar residents of the top states pay in taxes, they get several dollars back in federal funding, which often leads to higher-quality infrastructure, education, public health and more.”

Chip Lupo, WalletHub Analyst

Main Findings

Most Federally Dependent States

Notes: *No. 1 = Most Dependent
With the exception of “Total Score,” the columns in the table above depict the relative rank of a state, where a rank of 1 represents the most dependent for that metric.

Amount of Federal Contracts Received (per $ in Federal Taxes Paid)

Lowest

• 1. Delaware
• 2. Wyoming
• 3. North Dakota
• 4. Vermont
• 5. Rhode Island

Highest

• 46. Connecticut
• 47. Maryland
• 48. California
• 49. Texas
• 50. Virginia

Amount of Grants Received (per $ in Federal Taxes Paid)

Lowest

• 1. Wyoming
• 2. Vermont
• 3. South Dakota
• 4. New Hampshire
• 5. North Dakota

Highest

• 46. Pennsylvania
• 47. Florida
• 48. Texas
• 49. New York
• 50. California

Best State vs. Worst State: 84x Difference

Wyoming vs. California

Amount of Other Financial Assistance Received (per $ in Federal Taxes Paid)

Lowest

• 1. Wyoming
• 2. Vermont
• 3. Alaska
• 4. South Dakota
• 5. Delaware

Highest

• 46. Indiana
• 47. Pennsylvania
• 48. Minnesota
• 49. Florida
• 50. California

Best State vs. Worst State: 57x Difference

Wyoming vs. California

Gross Domestic Product (per Capita)

Highest

• 1. New York
• 2. Washington
• 3. Massachusetts
• 4. California
• 5. Delaware

Lowest

• 46. Kentucky
• 47. Alabama
• 48. Arkansas
• 49. West Virginia
• 50. Mississippi

Best State vs. Worst State: 2x Difference

New York vs. Mississippi

Show More

In-Depth Look at the Most Federally Dependent States

Alaska

Alaska is the most federally dependent state, as nearly 45% of the state’s revenue comes from federal funding. Some reasons why Alaska gets a lot of federal dollars include the difficulty of maintaining infrastructure in a big state with harsh weather and a small population, plus Alaska’s richness in natural resources, its vulnerability to disasters and its defensive importance.

Alaska also has a lot of federal jobs – in fact, nearly 5% of the state’s workforce is employed by the federal government. For context, the share for most states is only between 1% and 3%.

Finally, Alaska has a very good return on the taxes that its residents pay to the federal government. For every $1 that residents pay in taxes, the state receives $2.52 in federal funding, over double their investment.

Kentucky

Kentucky is the second-most federally dependent state, in large part because it receives a huge amount of federal funding compared to the taxes that residents pay. For every $1 paid in taxes, Kentucky gets $3.45 in federal funding. For context, 40 states get less than $2 in federal funding for every tax dollar.

Federal funding makes up a large share of Kentucky’s revenue as well, at nearly 44%, among the highest in the country. Kentucky doesn’t have quite as many federal jobs as other states, though. Around 1.8% of the state’s residents are employed by the federal government, which puts Kentucky around the middle of the 50 states for that particular metric.

West Virginia

West Virginia ranks third when it comes to dependence on the federal government, its residents get $2.74 in federal funding for every $1 they pay in taxes, which is a pretty great deal for them.

Federal funding makes up a large share of West Virginia’s revenue as well, at nearly 42% and more than 3.8% of West Virginia’s workforce is employed by the federal government. Both of these rates are among the highest in the country, proving that West Virginia’s economy owes a lot to the federal government.

Red vs. Blue States

Correlation Analysis

Ask The Experts

For further clarity on the problems contributing to federal-funding disparities, we talked to a panel of economics and public policy experts. Click on the experts’ profiles to read their bios and responses to the following key questions:

1. Should federal resources be allocated to states according to how much they pay in federal taxes or should some states subsidize others?
2. Which programs should be a state or local responsibility and which should be a federal responsibility?
3. What is the fairest way to redistribute federal resources back to the states?
4. What more can the current administration do to help reduce the impact of revenue shortfalls in state budgets during the current economic climate?

Ask the Experts

Kenneth Kickham
Ph.D. – Professor and Chair of Political Science - University of Central Oklahoma
Read More

Andrew Burnstine
Ph.D. – Associate Professor, College of Business and Management - Lynn University
Read More

Dr. Howard A. Frank
Professor of Public Policy and Administration; Director, Jorge M. Perez Metropolitan Center; Editor-in-Chief, Public Administration Quarterly – Florida International University
Read More

Lucy Dadayan
Ph.D. – Principal Research Associate, Tax Policy Center - Urban Institute & Brookings Institution
Read More

Nadav Shoked
Professor of Law – Northwestern University School of Law
Read More

Dr. Samuel B. Stone
Ph.D. – Professor of Public Administration, Division of Politics, Administration, and Justice – California State University, Fullerton, College of Humanities and Social Sciences
Read More

More Experts

Methodology

In order to determine the most and least federally dependent states, WalletHub compared the 50 states across two key dimensions, “State Residents’ Dependency” and “State Government’s Dependency.”

We evaluated those dimensions using three relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest level of federal dependency.

We then determined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order the states.

State Residents’ Dependency – Total Points: 50

• Return on Taxes Paid to the Federal Government: Triple Weight (~37.50 Points)
  Note: This metric was calculated by dividing federal funding in U.S. dollars by IRS collections in U.S. dollars.
• Share of Federal Jobs: Full Weight (~12.50 Points)

State Government’s Dependency – Total Points: 50

• Federal Funding as a Share of State Revenue: Full Weight (~50.00 Points)
  Note: This metric reflects the proportion of state revenue that comes from the federal government in the form of intergovernmental aid in 2023.

The following metrics were included in the infographic above for context only. They represent subsets of federal funding and are reflected in the first two metrics.

• “Federal Contracts” divided by “IRS Collections”
• “Grants” divided by “IRS Collections”
• “Direct Payments + Other Financial Assistance” divided by “IRS Collections”

Sources: Data used to create this ranking were collected as of February 9, 2026 from the Internal Revenue Service, U.S. Census Bureau, USAspending.gov and Bureau of Labor Statistics. Unless noted otherwise, the statistics underlying this report are from 2024 and 2025.

Supporting Video Files:

• YouTube (for web embedding)
• Raw video files (for editing into clips)