More than 100 million U.S. households, or 61% of all taxpayers, paid no federal income taxes last year, according to a new report.
The pandemic and federal stimulus led to a huge spike in the number of Americans who either owed no federal income tax or received tax credits from the government. According to the Urban-Brookings Tax Policy Center, 107 million households owed no income taxes in 2020, up from 76 million — or 44% of all taxpayers — in 2019.
“It’s a really big number,” said Howard Gleckman, senior fellow in the Tax Policy Center. “It’s also really transitory.”
Gleckman said the main reasons for the spike — high unemployment, large stimulus checks and generous tax credit programs — will largely expire after 2022, so the share of nontaxpayers will fall again starting next year.