The Distribution of Select Federal Tax Deductions and Credits Across the States
Note: This was originally published in 2014 and was recently updated to replace 2012 data with 2015 data.
Federal tax reform proposals often include expanding, reducing, or eliminating various tax expenditures—special exclusions, deductions, credits, and other provisions that allow people or businesses to reduce their income taxes.
This interactive map highlights the state distribution of several federal tax deductions and credits.
The maps reveal wide variation across the states, indicating that changing federal tax expenditures likely would change the geographic distribution of federal tax benefits.
Tax expenditures reduce the revenue the government would otherwise collect and are often similar to direct government spending in their goals as they seek to promote activities such as charitable giving and homeownership.
In 2017, federal tax expenditures are estimated to total about $1.6 trillion, rivaling total federal “discretionary” spending that Congress allocates annually to areas such as defense, education, and transportation.
This interactive shows the geographic distribution of itemized deductions and two tax credits: the child tax credit and the earned income tax credit. Itemized deductions as a group are estimated to total about $227 billion in forgone revenue in 2017 (see definition of summing tax expenditures). This amount is on a par with the largest single tax expenditures. The earned income tax credit ($64 billion) and the child tax credit ($54 billion) are some of the biggest federal tax credits. The geographic distribution of federal tax expenditures is influenced by how a particular expenditure is structured as well as differences across states in income and other demographic characteristics, economic conditions, state tax structures, and other factors.
It is important to note that deduction amounts shown in the maps are not comparable to, and cannot be added to, the credit amounts. This is because deductions reduce the amount of income that is subject to tax, whereas credits reduce the tax amount itself. Thus, the deduction amounts do not reflect the direct impact on a filer’s tax bill while the credit amounts do.
The percentage of all tax filers in the state who claim the deduction or credit.
The average deduction or credit for every tax filer in the state including those who do not claim it.
The average deduction or credit for each tax filer in the state who claims it.
Click on the states above to compare
Figures in table are rounded to the nearest tenth of a percent, which may result in minor variations in how states with the same rounded values are sorted when switching between ascending and descending order.