What IRS AGI migration data shows about taxpayer moves
Adjusted gross income (AGI) migration data from the IRS show that billions of dollars in reported income are moving each year from higher‑tax states to those with lower overall tax burdens, reshaping state tax bases, influencing budget choices, and highlighting how location decisions affect long‑term finances.
Each year, the IRS Statistics of Income Division, working with the U.S. Census Bureau, publishes migration files that track address changes on individual income tax returns. The latest release covers moves that occurred between the filing of 2021 returns in calendar year 2022 and 2022 returns in 2023, so it is effectively a snapshot of income and households on the move during that period. These files tally not only the number of tax filers changing states, but also the AGI associated with those moves.
The headline trend is clear: states with more competitive tax structures and lower overall tax burdens are seeing substantial net inflows of AGI, while several higher‑tax states are experiencing sizable net outflows. Analysis from the Tax Foundation based on the 2022–2023 IRS data shows that Florida recorded a net AGI inflow of about $20.6 billion, Texas gained roughly $5.5 billion, South Carolina about $4.1 billion, North Carolina $3.9 billion, and Tennessee $2.8 billion. (Tax Foundation)
On the other side, California saw a net AGI loss of roughly $11.9 billion, New York about $9.9 billion, Illinois $6.0 billion, Massachusetts $3.9 billion, and New Jersey $2.6 billion over the same period. (Armstrong Economics) These figures underscore that the migration story is about more than population; it is about income levels and tax capacity.
At the county level, the pattern is even more striking. Palm Beach County, Florida, posted the highest net AGI inflow in the country at about $3.0 billion, whereas Cook County, Illinois (home to Chicago), recorded the largest net AGI outflow at about $4.4 billion. This aligns with the broader state‑level picture and illustrates how certain metropolitan areas are emerging as clear net winners or net losers in the competition for high‑earning households.
From a population standpoint, Texas, Florida, North Carolina, South Carolina, and Tennessee posted the largest net gains in tax filers, with Texas adding about 56,000 new filers and Florida 55,000. California, New York, and Illinois experienced the largest declines in filer counts. While these numbers are significant, they still represent a modest share of each state’s total filers, which is one reason analysts emphasize caution when drawing broad economic conclusions.
Why higher‑income households are drawn to lower‑tax states
For many higher‑income households, moving from a high‑tax to a lower‑tax state can translate into meaningful annual savings, and when combined with factors like housing costs and lifestyle, state tax policy often becomes a deciding factor rather than a minor detail.
People rarely move for a single reason. Surveys of movers consistently rank family considerations, job changes, retirement, housing affordability, and climate near the top of the list. A Tax Policy Center review of IRS migration data notes that while headlines focus on a high‑tax‑to‑low‑tax narrative, actual relocation decisions are more complex and multi‑factor. (Tax Policy Center)
However, for households with substantial AGI, state income tax policy can tip the balance. For example, a professional couple with $500,000 in taxable income may face a combined state and local income tax rate in the low double digits in some jurisdictions, compared with a zero or low flat rate in a different state. Over a decade, the difference can amount to hundreds of thousands of dollars in cumulative tax payments, even before considering estate or property tax rules.
Recent IRS data highlight that the AGI leaving higher‑tax states is often concentrated among upper‑income filers. In Palm Beach County, incoming residents reported average incomes around $178,000, compared with roughly $99,000 for those leaving. (Armstrong Economics) That gap suggests that the households driving net AGI inflows are not just numerous; they also tend to have above‑average earning power.
For many of these households, tax savings are only part of the equation. Lower housing costs relative to income, access to professional opportunities, and a lifestyle that aligns with long‑term goals all matter. But when an interstate move is already under consideration—because of a job change, for example—state tax burdens can quickly move from background factor to central planning consideration.
From a planning standpoint, the takeaway is not that everyone should move from one group of states to another. Instead, it is that state tax policy can significantly influence lifetime after‑tax wealth. A thoughtful comparison of effective tax rates, housing costs, and total living expenses in potential destination states can clarify whether a move meaningfully supports your financial plan.
Winners and losers: State and county AGI inflows and outflows
The latest IRS migration figures show a clustering effect: a handful of states and counties account for a disproportionate share of net AGI inflows and outflows, concentrating both tax capacity and financial risk in specific regions.
On the inflow side, the top five states—Florida, Texas, South Carolina, North Carolina, and Tennessee—collectively gained more than $36 billion in net AGI in a single year based on the 2022–2023 data window. Florida’s $20.6 billion gain alone represents a large addition to its income tax base, even though the state does not levy a personal income tax. That AGI can still support other revenue sources such as sales and property taxes.
The outflow states tell a complementary story. California’s $11.9 billion AGI loss, New York’s $9.9 billion, Illinois’s $6.0 billion, Massachusetts’s $3.9 billion, and New Jersey’s $2.6 billion together reflect tens of billions of income shifting away from states that rely heavily on high‑earning residents for income tax revenue. For context, even a one or two percent reduction in the taxable income base for top brackets can complicate long‑term budget forecasts, especially in states where personal income tax receipts fund a large share of core services.
At the county level, Palm Beach County’s $3.0 billion AGI inflow is notable not just for its size but also for its composition. High‑earning retirees, remote professionals, and business owners can all contribute to that total, bringing with them spending power, demand for services, and local investment capital. Conversely, Cook County’s $4.4 billion AGI outflow suggests that higher‑earning households are relocating elsewhere, which may influence everything from local housing demand to small‑business revenues.
Population counts add another layer. Texas’s gain of about 56,000 filers and Florida’s gain of about 55,000 reflect not only more taxpayers but also more potential workers and consumers. California’s net loss of more than 100,000 filers, along with New York’s roughly 72,000 and Illinois’s almost 29,000, signals that some large urban centers may see slower growth in higher‑earning segments unless trends change.
For individuals and families, these state and county‑level figures provide useful context. If you are considering a move, reviewing where similar households are going—and why—can help you evaluate potential destinations in terms of both financial and lifestyle fit.
How shifting AGI affects state budgets and public services
When billions in AGI move across state lines, states on both sides of the trend face practical budget questions: how to adapt tax policy, manage spending, and maintain public services as their tax bases evolve.
For states losing AGI, the immediate concern is the potential erosion of personal income tax revenue, especially from higher‑earning residents. States such as California and New York have relatively progressive income tax systems, meaning a meaningful share of revenue comes from households in top brackets. As some of those households move, even modest declines in the tax base can complicate long‑range fiscal planning.
Lawmakers in outflow states may respond in several ways. Some may look at revising tax brackets, credits, or surcharges to retain high‑earning residents, while others may explore spending adjustments or alternative revenue sources. For example, a state facing recurring AGI outflows might evaluate whether a temporary tax surcharge on high incomes is sustainable, or whether a broader base with lower rates is more resilient. Data from the Tax Foundation’s 2026 State Tax Data resource shows significant variation in how states structure their tax mixes, from heavy reliance on income taxes to broader consumption or property tax systems. (Tax Foundation
For states gaining AGI, the questions look different. A growing tax base can support expanded infrastructure, education, and health services, but it can also create pressure on housing markets, transportation networks, and local amenities. Policymakers in net‑inflow states may consider how to invest in capacity while maintaining the tax and cost‑of‑living advantages that attracted new residents in the first place.
For example, a state that experiences rapid inflows of higher‑income households might see rising home prices in key metropolitan areas. If that reduces affordability for existing residents, policymakers may weigh targeted housing initiatives or infrastructure investments against the desire to maintain a competitive tax structure. These trade‑offs are increasingly central to state‑level economic strategy as AGI migration data gain attention.
For individuals, the practical implication is that where you live influences not only your personal tax bill but also the services and infrastructure available to you. Evaluating both sides of that equation can lead to more grounded relocation decisions.
Limits of the data: What AGI migration can and cannot tell you
IRS AGI migration data are a powerful tool for understanding broad trends, but they have important limits: they do not capture why people move, exactly when they move, or how their broader economic activity is distributed.
The IRS migration files are based on address changes between consecutive tax returns. That means they can identify that a taxpayer’s reported address shifted from one state or county to another, and they can associate that change with the AGI reported on each return. However, they do not record the exact date of the move. A relocation might have occurred months before the new return was filed, or shortly after, which complicates year‑to‑year comparisons.
Additionally, the address on a tax return does not always correspond perfectly to where income is earned. For households with multiple properties, cross‑border work arrangements, or business interests in several states, some economic activity may occur in a different location than the filing address would suggest. Analysts at the Tax Policy Center point out that these and other methodological features mean that AGI migration data should be interpreted as a broad indicator, not a precise measure of economic strength or weakness in any given year.
The data also cannot tell us why people move. Survey data from moving companies, for example, often show that family reasons, job changes, and retirement account for a large share of relocations. Taxes enter the picture as one factor among many, and their relative importance can vary across income levels, professions, and life stages.
Finally, because states such as California and New York have large populations and income bases, a net AGI loss number on its own does not necessarily indicate overall decline. A loss of $10 billion in AGI is more significant in a small state with a modest economy than in a very large one with a broad tax base. To draw robust conclusions, it is important to compare AGI migration data with other indicators such as employment growth, business formation, and long‑term population trends.
Planning considerations if you are weighing a tax‑motivated move
If you are considering an interstate move partly for tax reasons, it helps to analyze the numbers carefully, weigh non‑financial priorities, and coordinate with qualified professionals before making a decision.
First, quantify what you might save. Compare effective state and local tax rates in your current and potential destination states, including income, property, and sales taxes. For example, an upper‑income household saving two to three percentage points of income tax annually on a $400,000 income could retain an additional $8,000 to $12,000 per year. Over 15 years, that can have a meaningful impact on retirement readiness or other long‑term goals.
Second, factor in cost of living. Lower or zero income tax does not automatically mean lower costs overall. Housing, insurance, and health‑care expenses can vary significantly by region. A comprehensive projection that incorporates both tax differences and living costs can clarify whether a move advances your plan.
Third, consider timing and residency rules. Establishing tax residency in a new state typically requires more than spending a certain number of days there. States look at a combination of factors, such as where you own or rent a home, where you work, where your family lives, and where your important documents and registrations are located. Missteps can result in competing residency claims or unexpected tax assessments.
Fourth, look beyond one year. A move driven solely by near‑term tax savings may feel less attractive if it conflicts with career prospects, family support networks, or preferred lifestyle. Thinking in terms of a ten‑year or twenty‑year horizon can help align financial benefits with personal priorities.
Finally, coordinate with professionals who understand both tax rules and broader financial planning. A detailed plan can integrate the potential benefits of a move with investment strategy, retirement income planning, and estate considerations, helping you make an informed choice that fits your situation.
Sources:
Tax Foundation, April 20, 2026
IRS.gov, SOI Tax Stats, Migration Data (2022–2023 tax filing data), March 2026
