A closer look at income tax credits and refunds in metro Atlanta

What does tax season mean for you? Paperwork, owing money, and awaiting a tax refund may be on most people’s minds.

For April’s Regional Snapshot, we look at the most recent tax filer data (2013)  for metro Atlanta and at the zip code level in the region. Specifically, we explore the Earned Income Tax Credit, Child Tax Credit, and trends in Adjusted Gross Income. This analysis uses data and tools from IRS, Brookings, and Neighborhood Nexus.

You can click through the full slide deck at the bottom of the page, or click here for a PDF: http://documents.atlantaregional.com/snapshots/AprilTaxSnapshotARC.pdf

Highlights of metro comparisons and zip code level analysis are shown below.

Metro Comparison:

Atlanta has a high share of low-income residents, as measured by AGI: out of the top 10 most populous metro regions, Atlanta ranks #2 for the percentage of taxpayers with an AGI below $20,000 (35%). For low- to middle-income taxpayers, income tax credits like the EITC, CTC, and ACTC provide additional income that may lift them out of poverty

Adjusted Gross Income by metro

In Atlanta, 25% of tax returns received the EITC (the second highest compared to other metros) at an average value of $2,668 (greatest average value)

Percent of tax returns receiving EITC by metro

35.1% of tax returns in metro Atlanta claimed the Child Tax Credit (CTC)/Additional Child Tax Credit (ACTC, the refundable component of the CTC). Atlanta ranked #1 for the percent of total tax returns receiving a refund from the ACTC (19.4%) and had the second highest average ACTC refund at $1,422.

82.7% of tax returns in metro Atlanta that received the EITC also received the CTC/ACTC.

Child Tax Credit by metro

Zip code analysis:

The areas that have the greatest percent of returns receiving EITC are in south Fulton, southeast DeKalb, Clayton, and Spalding counties. These same areas, except for Spalding County, have also had the highest increase in the percent of returns with EITC.

Map of metro Atlanta zip codes by percent of EITC tax returns

Many zip codes in the outermost suburbs (Carroll, Walton, and Newton counties) also have low AGI (and corresponding patterns of high poverty rates and low educational attainment), but do not have as high percentages of EITC as the highlighted areas. The benefits of the credit may not be reaching low- to middle-income suburban residents.

Map of metro Atlanta zip codes highlighting areas with <15K AGI

The 36 zip codes with the greatest percentages of EITC returns (35.7%-55.4%) were selected for further analysis.

As expected, taxpayers in these zip codes have significantly lower AGI compared to metro Atlanta as a whole, with 53% of taxpayers in these zip codes reporting AGI <$15K. EITC taxpayers in selected zip codes

For an EITC taxpayer with an AGI of $15K:  $2,906 EITC + $1,309 ACTC = $4,215 in additional income

The additional income through the EITC combined with an ACTC refund would boost their income by 28%