PolicyMap recently updated its Brookings IRS data to include data from returns filed in 2008. This set of indicators provides data on tax return filers in geographies as small as zip codes, with information such as number of returns filed by different income groups and number of specific tax credits claimed. The data has a particular focus on tax returns with an Earned Income Tax Credit (EITC), having extensive data on those filings.

The EITC component makes the Brookings IRS data particularly useful. The EITC is a tax credit for low income filers, typically with children. As such, it is a good way to see statistics on just the working poor on a map. For example, if you were interested in seeing the amount of low-income individuals seeking higher education, a good indicator to look at might be the number of income tax returns that claimed EITC and filed Form 8863, which provides for education credits.

This data is separate from our IRS Statistics of Income (SOI) dataset, which has not yet been updated by the IRS. The Brookings Institution receives its data from the IRS’s Stakeholder Partnerships, Education, and Communication (IRS-SPEC) Return Information Databases, and summarizes it to ZIP codes, cities, counties, metropolitan areas, states, state legislative districts, and congressional districts. It differs from the SOI data in various technical ways, and includes different indicators. The SOI data, for example, contains data on charitable contributions that the IRS-SPEC data does not have.

For the time being, the IRS-SPEC data will be the only 2008 tax data on PolicyMap, as the Statistics of Income Division of the IRS is reviewing its methodology used for its ZIP code data, delaying their data release.

The Brookings IRS data is available in the “Money & Income” tab on the maps page.

Average amount of Earned Income Tax Credit (EITC) in 2006

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If we’ve learned one thing as we publish this fourth blog posting, it is that Fairfax County is always at one end of the spectrum along any indicator – and Youngstown is at the other. It’s no exception when it comes to income. In Fairfax County, the estimated median income in 2007 was $95,590. In Youngstown, it was only $27,438. While 6.64% % of households nationwide are estimated to earn more than $150,000 per year, almost a quarter of all households do in Fairfax. Significantly fewer households fall into this higher income bracket across the other swing spots.

Incomes

When looking at taxes, however, Youngstown no longer falls at the bottom of the spectrum.  It does not have the highest percentage of filers claiming the EITC – or the fewest that are subject to the AMT.  Why is this?  What makes Youngstown different when it comes to income tax returns?

In 2005 (the most recent year for which tax data is available from the IRS), 16.67% of filers claimed the Earned Income Tax Credit (EITC) nationally.  These swing spots (but for Fairfax), however, represent areas where far higher percentages of filers are considered working poor and claimed the EITC.  Over 31% of filers in Pueblo City, for example, claimed the EITC.  These numbers seem to have remained relatively steady between 2004 and 2005.

The Adjusted Minimum Tax or AMT is designed to ensure that even higher income households pay a minimum federal tax.  Nationally, 2.95% of filers were subject to the AMT.  In Fairfax, almost three times that amount (8.75%) were subject to the AMT while in Pueblo City, only .28% were.  And, while the percentage of filers subject to the AMT remained relatively constant between 2004 and 2005 in most swing spots, it rose almost 2 percentage points in Fairfax.

Taxes

IRS tax data for Elko will be available in PolicyMap later this week

As you might expect, higher percentages of income tax filers make charitable contributions or contribute to an IRA in Fairfax than do in the other swing spots.  Nationally, 31.12% of filers claimed charitable contributions in 2005 and 2.36% made tax-deductible contributions to an IRA.

On a side note, it has always seemed odd to us at PolicyMap that so few households nationwide make tax-deductible IRA contributions and so the numbers in these swing spots did not shock us, but should they?  Are too few households saving in IRAs – or are they using retirement savings vehicles that don’t get captured with the IRS return data?

Savings and Charitable Contributions

IRS tax data for Elko will be available in PolicyMap later this week

Data here is compiled from PolicyMap’s sources and include tax data from the Internal Revenue Service and income estimates from Claritas, Inc.

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Visit Friday for our final article on these Swing Spots, Part 5 – Housing Market: What are housing values and how have they changed over time? How leveraged are homeowners?

When it comes to economic life, the swing areas highlighted by the New York Times article on Sunday share one thing in common – a strong percentage of residents working in the retail industry. In all five areas, retail shows up as one of the top three industries in which its residents are employed, at levels approximating national rates.

Median incomes vary widely from Fairfax County, Virginia with an estimated 2007 median household income of $95,590 to Youngstown, Ohio where it was $27,438. The higher income areas also tend to have higher home sale prices. The median price of a home in both Fairfax County and Las Cruces far exceeds three times the median household income (a general rule for home buyers). In Youngstown, the low household income is matched by a very similar low cost of a home.

The table below ranks the swing areas by median household income. Not surprisingly, as incomes decrease, the percentage of residents claiming the Earned Income Tax Credit (EITC) rise and the percentage subject to the Alternative Minimum Tax (AMT) decreases.

Swing Area	Employed People in 2007*	Top 3 industries in which they work *	Median Household Income in 2007 *	Median Home Sale Price in 2006**	Percent claimed EITC in 2005***	Percent subject to AMT in 2005****
Fairfax County, VA	556,936	Professional, Scientific, & Technical Services – 18.21% Public Administration – 12.52% Retail – 9.03%	$95,590	$474,000	7.19%	8.75%
Elko City, NV	7,950	Agriculture – 23.52% Retail Trade – 11.34% Arts, Entertainment and Recreation – 9.23%	$54,776	$141,994	12.86%	1.17%
Las Cruces, NM	37,594	Educational Services – 17.64% Retail Trade – 12.57% Public Administration – 9.37%	$34,970	$158,402	30.84%	.38%
Pueblo City, CO	42,159	Health Care and Social Assistance – 15.38% Retail – 13.97% Construction – 8.62%	$33,996	$97,729	31.4%	.28%
Youngstown, OH	30,273	Manufacturing – 17.72% Healthcare and Social Assistance – 17.26% Retail – 12.43%	$27,438	$28,427	29.14%	.69%

* Data from Claritas estimates

** Data from Boxwood Means

*** Nationally, 16.67% claimed Earned Income Tax Credit in 2005

**** Nationally, 2.95% were subject to Alternative Minimum Tax in 2005

Visit Friday for Part 2: Race and Demographics to see who lives in these swing areas and how that has changed over time.

This data is pulled from PolicyMap’s report function which summarizes data for customizable study areas for its subscribers.

Maine follows at 3.24%, with Montana at a close 3.23%.  The states with the lowest percentage of people contributing to their IRA accounts are Alabama, at 1.71% and Mississippi at 1.57%.  Nationally, 2.63% of income tax filers made an IRA contribution in 2005.

New Jersey leads the country with an average IRA contribution of nearly $4,000 in 2005; up from $3,270 in 2004.

Washington, DC lags behind all the states in the average amount of IRA contributions at $3,041.

States Ranked by Percent of Returns with IRA Deductions in 2005
Rank in 2005	State	Percent of Returns with IRA Deduction in 2005	Average Amount of IRA Deduction in 2005	Percent of Returns with IRA Deduction in 2004	Average Amount of IRA Deduction in 2004
1	Vermont	3.76%	$3,560	3.77%	$3,004
2	Maine	3.24%	$3,539	3.31%	$3,014
3	Montana	3.23%	$3,498	3.20%	$2,958
4	New Hampshire	3.15%	$3,568	3.25%	$3,013
5	Oregon	3.02%	$3,610	3.04%	$3,035
6	South Dakota	2.96%	$3,565	2.99%	$3,029
7	Connecticut	2.91%	$3,846	2.97%	$3,216
8	Nebraska	2.87%	$3,445	2.94%	$2,902
9	Colorado	2.82%	$3,557	2.91%	$2,947
10	New Jersey	2.82%	$3,951	2.90%	$3,270
11	Rhode Island	2.79%	$3,690	2.83%	$3,092
12	Wyoming	2.79%	$3,575	2.78%	$2,989
13	New York	2.78%	$3,754	2.86%	$3,115
14	Idaho	2.78%	$3,627	2.71%	$3,020
15	North Dakota	2.75%	$3,557	2.76%	$2,969
16	Pennsylvania	2.74%	$3,424	2.81%	$2,903
17	Massachusetts	2.73%	$3,672	2.86%	$3,100
18	Iowa	2.71%	$3,484	2.73%	$2,970
19	Minnesota	2.64%	$3,446	2.72%	$2,955
20	California	2.63%	$3,869	2.67%	$3,192
21	Washington	2.58%	$3,591	2.58%	$3,001
22	Wisconsin	2.55%	$3,396	2.62%	$2,900
23	Maryland	2.53%	$3,521	2.58%	$2,968
24	Virginia	2.44%	$3,520	2.50%	$2,943
25	Florida	2.44%	$3,700	2.49%	$3,082
26	Kansas	2.42%	$3,495	2.45%	$2,922
27	Illinois	2.34%	$3,677	2.40%	$3,087
28	Arizona	2.33%	$3,662	2.36%	$3,023
29	New Mexico	2.21%	$3,542	2.19%	$2,940
30	North Carolina	2.16%	$3,514	2.19%	$2,967
31	Delaware	2.16%	$3,553	2.20%	$3,027
32	Missouri	2.11%	$3,518	2.17%	$2,972
33	Nevada	2.10%	$3,663	2.15%	$3,054
34	Indiana	2.03%	$3,375	2.13%	$2,840
35	Michigan	2.01%	$3,371	2.07%	$2,875
36	Utah	1.99%	$3,606	1.97%	$2,970
37	Ohio	1.99%	$3,297	2.05%	$2,794
38	South Carolina	1.94%	$3,487	1.91%	$2,972
39	Georgia	1.93%	$3,545	1.98%	$2,969
40	Arkansas	1.93%	$3,783	2.00%	$3,204
41	Oklahoma	1.88%	$3,733	1.88%	$3,127
42	District of Columbia	1.86%	$3,041	1.90%	$2,548
43	Louisiana	1.84%	$3,727	1.91%	$3,055
44	Tennessee	1.84%	$3,525	1.89%	$2,934
45	Texas	1.82%	$3,784	1.85%	$3,120
46	West Virginia	1.78%	$3,311	1.81%	$2,796
47	Kentucky	1.76%	$3,506	1.85%	$2,955
48	Alabama	1.71%	$3,588	1.76%	$3,006
49	Mississippi	1.57%	$3,627	1.67%	$3,024

These numbers are based on statistics provided by the IRS for Federal Income Tax Returns and do not include any contributions to IRAs that are not reflected on income tax returns, or contributions to pensions or other employer retirement plans. (See Our Data for a complete description of the IRS Federal Income Tax Returns.)