IRS data confirms Illinois is losing residents, wealth flight at record pace

IRS data confirms Illinois is losing residents, wealth flight at record pace

Illinois lost more than 100,000 residents and $8.5 billion on net in adjusted gross income to other states from 2019-2020, according to new federal tax return data. Those leaving earned $31K more than those coming in.

The Internal Revenue Service is reporting Illinois is losing: 100,921 residents; $8.5 billion total that they earned; and those leaving the state earn $31,000 more than those moving into Illinois.

New 2020 tax return data released May 24 by the Internal Revenue Service confirms Illinois continues to lose large numbers of residents to other states as well as their income. From 2019-2020, Illinois lost 100,921 residents and nearly $8.5 billion in adjusted gross income on net to other states.

The massive decline in Illinois’ population was a result of Illinois losing residents to nearly every other state. On net, Illinois lost people to 44 of the 50 states.

The most popular destinations for Illinoisans were Florida (-16,575); Indiana (-11,969); Texas (-10,894); Wisconsin (-7,664); and Arizona (-7,442). Illinois lost residents to every neighboring state during the year. Meanwhile, the six states from which Illinois attracted residents on net, only added 2,573 residents to population totals.

The $8.5 billion in income lost was not only because more people moved out than in. It also was because those who left Illinois earned significantly more than those moving into the state. Illinoisans leaving the state earned nearly $31,000 (41%) more than those who moved into the state.

Illinoisans fleeing the state earn an average of $105,871 per tax return, while those moving into the state earn only $75,265 per tax return, a loss to Illinois of $30,606 per return.

The IRS data is just the latest to confirm Illinois is losing population, despite incorrect assertions otherwise. Estimates of components of population change from the Census Bureau, which is the most complete dataset available, have also pinpointed domestic migration as the sole driver of Illinois’ population decline. The Census Bureau uses IRS migration data – as well as other data – to construct their domestic migration and population change estimates. These estimates are in line with past IRS data.

The IRS data likely underestimates Illinois’ outmigration, because 32 million households (18%) nationwide don’t file federal tax returns and changes in filing activity can prevent matching tax returns year-to-year.

As more and more data continues to confirm Illinois has a serious exodus, Gov. J.B. Pritzker has attempted to take advantage of confusion surrounding Census Bureau data to claim Illinois is growing. The root causes of Illinois’ population struggles remain jobs, housing and tax policy.

Rather than trying to spin population data for political gain during a reelection campaign, Pritzker should focus on reforms to address Illinois’ $313 billion pension debt that is eating state revenues and crowding out valuable services for residents. It is also forcing them to pay the highest taxes in the Midwest.

Ignoring or denying there is a population problem makes it worse. So does having fewer people to pay those high taxes.

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