IRS data shows Kentucky lost income while gaining population in 2021
Published 11:43 am Tuesday, May 9, 2023
By Steve Bittenbender
The Center Square
New data from the Internal Revenue Service shows Kentucky gained more than 6,000 residents in 2021 but saw more than $117 million in income leave the state.
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The federal agency released data last week showing the number of returns filed in each state and changes in taxpayer residency. In Kentucky, more than 1.5 million returns listing 3.1 million taxpayers and dependents were filed in 2021.
Of those returns, 48,969 were filed from people who filed from other states or abroad in 2020. Those returns covered 90,972 taxpayers and dependents. Conversely, the IRS reported that 46,417 returns were filed in 2021 in other states by people who filed from Kentucky in 2020, with those returns listing 84,548 taxpayers and dependents.
Despite the slight population gain, those leaving Kentucky reported higher adjusted gross incomes, $2.94 billion, to those coming to the Bluegrass State, $2.83 billion.
The main reason for the net loss of income came from Kentuckians who moved to Florida. The IRS showed a net migration of 2,644 individuals to Florida from Kentucky (9,717 people left Kentucky for Florida, while 7,073 left Florida for Kentucky) in 2021, with a net income loss of $324.7 million for Kentucky.
Kentucky also saw millions in income cross state lines. The state saw a net loss of 1,788 people to Indiana, with a net loss of income totaling $64.5 million. The state only had a net loss of 162 residents to Tennessee, but it saw $62.5 million in income leave the state for its neighbor that doesn’t have a state income tax.
What helped soften the blow for Kentucky was that thousands came from larger states, many of which have higher state tax rates.
Kentucky saw a net gain of 2,362 individuals coming from California and added $108.9 million in income after factoring in those who left Kentucky for California.
The state also got a net gain of 1,464 residents from Illinois, with a net gain of $88.2 million in income.
The 1,153 net gain in population from New York led to $31 million more in income, while a net gain of 583 people from Ohio brought $32.6 million in income south of the Ohio River.