Tens of thousands of taxpayers came to Arizona in the beginning of the COVID-19 pandemic, according to IRS migration data released Thursday.
Federal tax forms filed in 2021 show Arizona welcomed 238,555 taxpayers and dependents who had previously filed as living in another state. Conversely, 181,480 Arizonans went elsewhere.
Those taxpayers moving into and out of the state represent a $4.4 billion increase in adjusted gross income when outgoing tax dollars are subtracted, according to the new IRS data.
The data is compiled by comparing the addresses of taxpayers before and after they change states and then shifting their gross income. People who didn’t file taxes aren’t reflected in the data. A return received in 2020 represents a taxpayer’s residence in 2019. The agency’s latest data reflects 2020 tax filings sent in 2021.
The boost in gross income was reflected in the state’s unexpected budget surplus.
“The negative economic impact of the coronavirus pandemic … was substantially less than expected,” a Joint Legislative Budget Committee report said of the 2021 budget. “By January 2021, we estimated the projected FY 2021 ending balance to be $1.8 billion. By June 2021, the ending balance was adjusted upward by another $1.1 billion due to accelerating revenue collections.”
Most of the incoming taxpayers were from California. The data show 63,097 taxpayers and their dependents moved from California to Arizona in that year, bringing along with them nearly $3.7 billion in adjusted gross income. Just over 25,000 Arizonans did the opposite, the most common destination for those leaving the state.
Overall, “red states” won the battle for the hearts and homes of moving taxpayers. Only Florida, Texas, the Carolinas, and Tennessee gained more net residents than Arizona. The states losing the most were California, New York, Illinois, Massachusetts, and Louisiana.
Republished with the permission of The Center Square.
