New IRS migration data: New York, California, Illinois are the nation’s big losers of people and their wealth, Florida, Texas the big winners – A Wirepoints 50-state Survey
By: Ted Dabrowski and John Klingner
Illinois, New York and California continued their streak as the nation’s biggest losers of residents and their wealth to other states, according to a Wirepoints analysis of newly-released Internal Revenue Service migration data.
Texas and Florida continued to be the nation’s big winners.
The latest IRS state-by-state migration data is based on tax returns filed in 2020 and 2021, covering taxpayers (tax filers and their dependents) who moved from one state to another between 2019 and 2020 (see appendix for changes in our reporting methodology).
Florida, the nation’s perennial winner, gained in 2020 the most net people, 256,000, and the most net Adjusted Gross Income (AGI), $39 billion. Texas followed with a gain of 175,000 people and $10.9 billion in AGI.
In contrast, states like California, New York and Illinois once again experienced some of the nation’s biggest losses. California lost more people than any other state, with more than 332,000 net movers taking $29 billion to other states.
Wirepoints’ accompanying Illinois analysis includes a long-term look at out-migration from the state.
The IRS migration report provides hard, indisputable data on the movement of Americans between states. The agency reviews tax returns annually to track when and where tax filers and their dependents move. It also aggregates the ages, income brackets and adjusted gross incomes of filers.
Winners and losers
The Sunshine State attracted over $57.9 billion in Adjusted Gross Income (AGI) from 699,000 new residents (tax filers and their dependents) that moved into Florida in 2020. On the flip side, Florida lost $18.7 billion in AGI from 443,000 people who left. On a net basis, Florida came out ahead with 256,000 net new people and $39.2 billion in net new taxable income.
That was a total gain of 3.1 percent of the state’s total AGI ($711 billion).
Texas was the runner up with an AGI income gain of $10.9 billion, followed by Nevada with $4.6 billion. North Carolina and Arizona rounded out the top five with net gains of $4.5 billion and $4.4 billion, respectively. (See Appendix for top 10 winners of people.)
On the losing side, California suffered the worst outflow of money of any state in 2020. The Golden state lost a net $29.1 billion in income, or 2.0 percent of its AGI, while a net of 332,000 residents moved out.
New York was next, losing a net $24.5 billion and 262,000 people. Illinois was 3rd with a net loss of $10.9 billion and 105,000 people. Massachusetts and New Jersey were in 4th and 5th place, with $4.3 and $3.8 billion in income losses, respectively. (See Appendix for top 10 losers of people.)
The opposite is true for migration winners like Florida. Gains in people and income pile on top of each other each year, building an ever-growing tax base. In 2020 alone, the state’s tax base was some $230 billion higher due to the 21-year string of positive income gains from net in-migration.
Even though Florida doesn’t tax incomes, Wirepoints also added up Florida’s cumulative AGI to make an apples-to-apples comparison with New York. When the Sunshine State’s AGI gains are accumulated from 2000 to 2020, it totals $1.75 trillion in income that could have been taxed over the entire period.
The competition for people matters
Illinois, one of the nation’s other big losers, shows just how damaging being an “exit” state can be – especially when a state starts to lose its wealthier residents and they are only partially replaced by people who make less. The Illinoisans who fled in 2020 earned, on average, $44,000 more than the residents Illinois gained from other states. That’s the biggest gap since at least 2000, based on Wirepoints’ analysis of the IRS data.