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Tuesday, May 25, 2010

50-State Ranking: Mortgage Interest Deduction

Tax Foundation, Tax Savings from Mortgage Interest Deduction Vary Significantly from State to State:

Mortgage Interest Deduction by State, Tax Year 2008

State

Percentage of Returns Claiming Deduction

Rank

Average Deduction
(all returns)

Rank

Average Deduction
(for returns claiming one)

Rank

United States

26.83%


$ 3,279


$ 12,221


Alabama

24.02%

32

$ 2,226

36

$ 9,267

38

Alaska

22.42%

38

$ 2,689

24

$ 11,994

16

Arizona

31.53%

11

$ 4,293

9

$ 13,616

7

Arkansas

19.24%

45

$ 1,610

46

$ 8,365

45

California

29.24%

19

$ 5,520

1

$ 18,876

1

Colorado

34.54%

3

$ 4,594

4

$ 13,300

9

Connecticut

35.15%

2

$ 4,396

8

$ 12,509

12

Delaware

31.80%

9

$ 3,817

14

$ 12,006

15

Florida

24.92%

28

$ 3,333

20

$ 13,375

8

Georgia

31.13%

12

$ 3,375

17

$ 10,844

24

Hawaii

24.20%

31

$ 4,048

11

$ 16,730

2

Idaho

29.11%

20

$ 3,081

21

$ 10,587

25

Illinois

28.78%

21

$ 3,337

19

$ 11,593

19

Indiana

23.97%

33

$ 2,070

38

$ 8,637

42

Iowa

20.35%

43

$ 1,649

45

$ 8,104

49

Kansas

23.82%

34

$ 2,060

39

$ 8,647

41

Kentucky

24.57%

30

$ 2,050

40

$ 8,345

46

Louisiana

18.68%

46

$ 1,780

43

$ 9,526

33

Maine

25.81%

25

$ 2,529

28

$ 9,798

31

Maryland

37.94%

1

$ 5,372

2

$ 14,162

5

Massachusetts

31.74%

10

$ 4,064

10

$ 12,805

11

Michigan

27.97%

22

$ 2,659

25

$ 9,505

34

Minnesota

33.71%

4

$ 3,714

16

$ 11,016

21

Mississippi

18.39%

47

$ 1,526

47

$ 8,301

47

Missouri

25.50%

26

$ 2,372

30

$ 9,303

36

Montana

23.42%

36

$ 2,316

32

$ 9,890

30

Nebraska

23.10%

37

$ 1,901

42

$ 8,233

48

Nevada

29.55%

17

$ 4,580

5

$ 15,502

3

New Hampshire

30.68%

15

$ 3,726

15

$ 12,142

14

New Jersey

33.34%

6

$ 4,406

7

$ 13,215

10

New Mexico

21.48%

39

$ 2,356

31

$ 10,969

22

New York

23.73%

35

$ 2,897

23

$ 12,206

13

North Carolina

29.43%

18

$ 2,979

22

$ 10,122

27

North Dakota

14.60%

50

$ 1,222

50

$ 8,372

44

Ohio

26.74%

23

$ 2,266

35

$ 8,475

43

Oklahoma

21.27%

40

$ 1,700

44

$ 7,992

50

Oregon

32.46%

8

$ 3,858

13

$ 11,885

17

Pennsylvania

25.07%

27

$ 2,439

29

$ 9,728

32

Rhode Island

30.74%

14

$ 3,367

18

$ 10,951

23

South Carolina

26.17%

24

$ 2,607

27

$ 9,959

28

South Dakota

14.84%

49

$ 1,396

48

$ 9,404

35

Tennessee

20.70%

41

$ 2,143

37

$ 10,349

26

Texas

20.36%

42

$ 2,027

41

$ 9,955

29

Utah

33.17%

7

$ 3,875

12

$ 11,683

18

Vermont

24.87%

29

$ 2,313

33

$ 9,299

37

Virginia

33.61%

5

$ 4,737

3

$ 14,094

6

Washington

31.04%

13

$ 4,426

6

$ 14,262

4

West Virginia

15.20%

48

$ 1,348

49

$ 8,870

39

Wisconsin

29.92%

16

$ 2,615

26

$ 8,739

40

Wyoming

20.14%

44

$ 2,285

34

$ 11,350

20

Dist. of Columbia

26.93%


$ 4,502


$ 16,720



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Comments

Not sure how helpful these data are, specifically the middle column about average deductions. Since state income taxes are deductible, this column is largely just telling us about which states have the highest/lowest income taxes, regardless of the mortgage interest deduction.

Posted by: Jeremy Bearer-Friend | May 25, 2010 8:45:40 PM

The reason why the data is helpful is that it identifies who it is that is benefitting by deducting their mortgage interest from their income taxes. It is overwhelmingly a benefit to residents of California, Maryland, Virginia, Connecticut, and New Jersey. If you live in West Virginia, for example, logically you should be seeking a change in the law to end mortgage interest deductions.

Posted by: Les | May 26, 2010 1:00:46 PM

This chart is just a reflection of state by state property values.

Posted by: joeindc44 | May 27, 2010 5:44:11 PM