May 25, 2010
Mortgage Interest Deduction Benefits California, Maryland Taxpayers Most
Tax Foundation Report Based on New IRS Data Outlines Average Mortgage Interest Deduction By State
Washington, DC, May 25, 2010 -- Tax filers in California saw the highest average mortgage interest deduction in 2008 -- $5,520 among all tax returns filed and $18,876 among tax returns claiming the deduction, according to a Tax Foundation report based on newly released IRS data.
Maryland tax filers had the second-highest average deduction among all tax returns, $5,372, and fifth-highest average amount among returns claiming the deduction, $14,162. Nationally, the average tax return deducted $3,279 in mortgage interest, while the average amount among tax returns that deducted mortgage interest was $12,221.
"The savings from state to state vary for two reasons: First and most importantly, some states have higher average incomes," said Tax Foundation Chief Economist Patrick Fleenor, who wrote the report. "Secondly, in some locations, such as New York City, renting is more prevalent so fewer people claim the deduction."
The report, "Tax Savings from Mortgage Interest Deduction Vary Significantly from State to State," is No. 230 in the Tax Foundation Fiscal Fact series and is available online at http://www.taxfoundation.org/publications/show/26341.html.
For tax year 2008, more than a quarter of the nation's 143 million tax returns claimed the mortgage interest deduction, 26.8 percent. Maryland saw the highest percentage of tax filers claiming the deduction, 37.94 percent, followed by Connecticut (35.15 percent), Colorado (34.54 percent), Minnesota (33.71 percent), Virginia (33.61 percent), New Jersey (33.34 percent), Utah (33.17 percent), Oregon (32.46 percent), Delaware (31.80 percent) and Massachusetts (31.74 percent).
Following California and Maryland, the states that saw the highest average mortgage interest deduction among all tax returns were Virginia ($4,737), Colorado ($4,594), Nevada ($4,580), Washington ($4,426), New Jersey ($4,406), Connecticut ($4,396), Arizona ($4,293) and Massachusetts ($4,064).
The states that saw the highest average deduction among tax returns claiming the mortgage interest deduction after California were Hawaii ($16,730), Nevada ($15,502), Washington ($14,262), Maryland ($14,162), Virginia ($14,094), Arizona ($13,616), Florida ($13,375), Colorado ($13,300) and New Jersey ($13,215).
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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