Tax Aid in Recovery Package Would Reach Large Numbers of Workers in Every State

PDF of this report (2pp.)

By Arloc Sherman

Updated February 26, 2009

Tax credits in the economic recovery package provide tax relief to most workers. The centerpiece of the tax relief is a new Making Work Pay Credit of up to $400 per worker. The credit phases in at the same rate as Social Security taxes and is available to all workers (except those claimed as another taxpayer's dependent) earning up to $95,000 and married couples earning up to $190,000. In 2009, the credit would be reduced by the amount (if any) of the family's Economic Recovery Payment, a one-time payment of $250 for recipients of Social Security, SSI, and certain other benefits.

Some families helped by the Making Work Pay Credit — those with children and low or moderate incomes — will receive additional help through expansions in the Earned Income Tax Credit and Child Tax Credit.

The following table shows estimates, by state, of the number of taxpayers eligible to receive the Making Work Pay Credit: 110.7 million taxpayers nationwide, according to figures from the Tax Policy Center. The state numbers are calculated by assigning each state its share of the 110.7 million total based on its share of wage-earning tax filers in 2006 according to IRS data.[1]

The table shows that, in every state and the District of Columbia, large numbers of tax filers will benefit from the provision. Substantial numbers will benefit even in small states like Wyoming (206,000), Alaska (274,000), and North Dakota (256,000). In the largest states, the numbers range up to 12.4 million in California, 8.0 million in Texas, 6.8 million in New York, and 6.7 million in Florida.

TABLE 1:
Estimated Taxpayers Benefiting from
Making Work Pay Credit, by State

State

Number

Alabama

1,662,000

Alaska

274,000

Arizona

2,080,000

Arkansas

973,000

California

12,382,000

Colorado

1,786,000

Connecticut

1,306,000

Delaware

335,000

Dist of Columbia

217,000

Florida

6,689,000

Georgia

3,349,000

Hawaii

505,000

Idaho

523,000

Illinois

4,705,000

Indiana

2,429,000

Iowa

1,113,000

Kansas

1,023,000

Kentucky

1,488,000

Louisiana

1,490,000

Maine

510,000

Maryland

2,169,000

Massachusetts

2,447,000

Michigan

3,726,000

Minnesota

2,025,000

Mississippi

997,000

Missouri

2,152,000

Montana

356,000

Nebraska

684,000

Nevada

953,000

New Hampshire

535,000

New Jersey

3,240,000

New Mexico

690,000

New York

6,760,000

North Carolina

3,227,000

North Dakota

256,000

Ohio

4,543,000

Oklahoma

1,226,000

Oregon

1,304,000

Pennsylvania

4,715,000

Rhode Island

414,000

South Carolina

1,586,000

South Dakota

303,000

Tennessee

2,214,000

Texas

8,034,000

Utah

879,000

Vermont

252,000

Virginia

2,911,000

Washington

2,360,000

West Virginia

625,000

Wisconsin

2,213,000

Wyoming

206,000

Total

110,700,000

End Notes:

[1] We assigned each state its share of the national total based on its share of taxpayers with any wage or salary income and with AGI below $100,000 if single and below $200,000 if a married couple. (The number of married filers is an estimate.) Thus, if a state had 3 percent of the national total of such taxpayers, we assigned it 3 percent of 110.7 million.

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