A new report from the Urban-Brookings Tax Policy Center shows that 61% of all taxpayers, more than 100 million households, paid no federal income taxes during 2020. This is an increase from the steady 44% of taxpayers who paid no federal income taxes for the last decade through 2019. The increase was fueled by pandemic-related unemployment, stimulus checks and generous tax credits. Most of these will expire after 2022, which will result in a decrease in non-taxpayers starting next year. Only an estimated 20% of households paid neither income tax nor payroll taxes. The Tax Policy Center estimates that nearly everyone paid some other form of taxes, including state income taxes, state and local sales taxes, property taxes, and excise taxes.
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