Share of Tax Filers in Each State Who Owe No Federal Income Tax
According to the latest IRS data analyzed by Investopedia, Mississippi had the highest share of tax filers who owed no federal income tax in 2023 at nearly 29%. This is largely due to deductions and credits that reduce or eliminate taxes for low-income households, retirees, and working parents. The percentage ranged from about 16% in Washington, D.C., to Mississippi's top share. The data highlights how income levels, demographics such as age and family status, and geographic factors influence the number of zero-tax filers across states. Southern states tend to have higher shares due to lower incomes and poverty rates compared to other regions. Tax credits like the earned income tax credit also play a significant role in reducing or eliminating federal taxes for eligible individuals. The phenomenon has political implications as it relates to debates over who pays for government services, with some arguing that low-income filers benefit from deductions while higher earners bear more of the burden.
Topics: Federal Income Tax IRS Data Analysis Low-Income Households State-Level Tax Trends