mortgage interest deduction, widely viewed as a tax
break for a broad slice of middle-class America,
benefits the residents of some states far more than
others, according to a new report by the Pew Charitable
number of filers who take the deduction, and the amounts
they claim, vary widely. The percentage of tax filers
deducting mortgage interest in 2010 ranged from a high
of nearly 37 percent in Maryland to a low of 15 percent
in West Virginia and North Dakota, according to Pew’s
report, The Geographic Distribution of the Mortgage
Interest Deduction. (Stateline is also funded by the Pew
amount of the tax break ranged from a high of $4,580 per
filer in Maryland to a low of $1,192 in North Dakota,
the report said. The national average was $2,713.
less than one-half of homeowners claim the deduction,
which generally allows tax filers who own a home and
itemize their deductions to subtract interest paid on
mortgage debt from their gross income.
report comes as Congress considers an overhaul of the
tax code to balance the budget. Tax filers deducted
nearly $360 billion in mortgage interest in 2010 at a
cost of roughly $72 billion in federal income tax
revenue, Pew said.
at who benefits by state should inform federal
policymakers as they consider options for changing or
eliminating tax expenditures over the next several
years," Pew’s Anne Stauffer, an expert on federal
and state fiscal policy, said in a statement.
filers in and around larger metropolitan areas, where
property values and incomes tend to be higher, generally
claimed the mortgage interest deduction at higher rates
than filers in less-populous areas. However, Pew found
that factors other than property values and income, such
as housing turnover, were major contributors to the
with the highest claim rates were concentrated along the
East Coast and in parts of the West; those with the
lowest claim rates were mostly in the South,
particularly in the band from Texas to Mississippi and
stretching up to West Virginia, the report said.
had the most tax filers in the country in 2010, at 16.7
million, as well as the highest number of claims, at 4.6
million. New York, Florida, and Texas — all top five
states in terms of the number of tax filers — were
also at the top of the list or total deductions in
dollars claimed, Pew said.
contrast, among the 10 states with the greatest number
of tax filers, Ohio, Michigan, and Georgia did not make
the top-10 list of states with the largest amount of
dollars claimed, Pew said. Virginia, Maryland and
Washington state, all with lower numbers of filers, took
their place in the top-10 list for dollars claimed under
the mortgage interest deduction.
variation across metropolitan areas within states is
even greater. In Texas, for example, the state’s
highest claim rate — in the Austin area — is four
times larger than the lowest rate, in the Odessa area,
according to the report.