Taxpayers with Zero Income Tax Liability: Trends Over Time and Across Income Levels [March 10, 2017]   [open pdf - 225KB]

"An estimated 44% of U.S. households will pay no federal income tax in 2016. Some individuals or households do not pay federal income taxes because their income was below the filing threshold. Other individuals or households filing federal income tax returns pay no federal income tax due to either structural features or special provisions in the tax code. A 2011 analysis found that of nontaxable 'tax units,' about half were made nontaxable by tax expenditures (special provisions in the tax code such as credits and deductions). The other half were made nontaxable by structural features of the income tax system, namely the standard deduction and personal exemptions. Many tax units with no federal income tax liability have positive payroll tax liability. In 2016, an estimated 27% of tax units have zero or negative federal tax liability, when both income and payroll taxes are considered. For these tax units, it is possible that refunds from the income tax system offset or more than offset positive payroll tax liability. The proportion of tax units with no income or payroll tax liability in 2016 is estimated at 18%."

Report Number:
CRS Insight, IN10667
Public Domain
Retrieved From:
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html
Media Type:
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