IRS: Illinois lost 105K residents, $11B in income to other states in 2021

IRS: Illinois lost 105K residents, $11B in income to other states in 2021

Illinois lost more than 105,000 residents and $10.9 billion on net in adjusted gross income to other states from 2020-2021, according to new federal tax return data. Losses were spread across every age and income group.

New 2021 tax return data released April 27 by the Internal Revenue Service confirms Illinois continues to lose large numbers of residents to other states as well as their income. From 2020-2021, Illinois lost 105,109 residents and $10.9 billion in income to other states, both record highs.

The massive decline in Illinois’ population was a direct result of losing residents to virtually every other state. On net, Illinois lost people to 45 of the 49 other states in the nation.

The most popular destinations for Illinoisans leaving the state were Florida (-21,632); Texas (-13,929); Indiana (-11,554); Tennessee(-7,645); and Wisconsin (-7,468). Illinois lost residents to each neighboring state during the year. The four states and the District of Columbia from which Illinois gained residents only boosted the state’s population by 1,426.

The $10.9 billion in income that Illinois lost was not only because more people moved out than in. It was also because those who left Illinois earned $37,236 (54%) more than those who moved into the state.

Illinoisans fleeing the state earned an average of $105,693 per tax return, while those moving into the state earned only $68,456 per tax return, a net loss of $37,236 per return.

The IRS data provide even more detail about those who are leaving the state. Illinois lost residents on net from every single income bracket reported by the IRS in 2021.

51% of the residents who left made more than $100,000 per year, 25% of lost residents made less than $50,000, 24% made between $50,000-$100,000. Those who left the state between 2020 and 2021 also reported 23% higher income growth than those who moved into the state, indicating that leaving Illinois provided better financial returns to those who left compared to those who moved into the state.

Not only did Illinoisans of all income groups leave the state in 2021, Illinoisans from every age group also fled on net during the year.

Particularly troubling is that 65% of residents lost on net were prime working age tax filers ages 26-54 and their dependents. Those age 65 and up represented only 14% of Illinoisans who left the state while 5% were below age 26. That dispells the notion Illinois’ migration problems were solely because of high school graduates attending college out of state.

When looking at age and income brackets combined, Illinois lost residents from every combined age and income bracket recorded by the IRS.

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 and other Illinois politicians continue to deny there is a people problem in Illinois. On top of tangible evidence of Illinois’ outmigration crisis from the IRS, new surveys of Illinoisans show 51% would leave the state if given the opportunity. The main reason Illinoisans want to leave the state – high taxes.

The record number of residents who left Illinois this year should be a wake-up call to the state’s leaders, who refuse to adopt policies that would make it easier for residents to stay in Illinois. Reforms that would ease Illinoisans’ tax burden or reduce arduous business regulations are needed to make the state more affordable and send people running to Illinois, rather than away from it.

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