The Census Bureau’s official income and poverty estimates are defined using money income. Census money income is defined as income received on a regular basis before federal and state income taxes and credits, social security payments, medical out-of-pocket expenses, noncash benefits, and so on. Money income is used in the Census Bureau’s Income and Poverty reports examining household income, income inequality, and the official poverty measure.

Post-tax income and poverty estimates are also important for understanding the total resources available to individuals and households. However, the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), the source of Census’s official income and poverty estimates, does not collect information from respondents about tax filing, tax liabilities, or tax credits received.

Instead, the Census Bureau imputes federal, state, and payroll tax liabilities and several tax credits via a microsimulation tax model using information from the CPS ASEC and information from federal and state tax forms and instructions. The Census Bureau first used an internal tax model to produce after-tax income estimates for the 1975 and 1981 March CPS microdata files. Each year, the Census Bureau updates this microsimulation program to account for changes in federal and state tax policy. The tax variables imputed for each CPS ASEC respondent are reflected in the Census Bureau’s Income and Poverty reports examining post-tax income and the Supplemental Poverty Measure (SPM).

This page provides resources related to the CPS ASEC tax model, including documentation, research using to the tax model, and user notes for the tax model. 

The comprehensive documentation of the CPS ASEC Tax Model details the methodology, assumptions, and data underlying the model. These papers also discuss the limitations of the CPS ASEC Tax Model and present aggregate statistics for comparisons with tabulations from the Internal Revenue Service.

The Census Bureau created the CPS ASEC Tax Model in the early 1980s, and the model undertook a major methodological update in 2004. The 2022 documentation, Methods and Assumptions of the CPS ASEC Tax Model, provides the most up-to-date information on the tax model.

Census has produced a number of working papers related to aspects of the tax model. Links to the relevant research papers are provided below.

The CPS ASEC Tax Model is updated annually to incorporate changes to federal and state tax laws. These user notes summarize the changes and adjustments made to the tax model each year and provide guidance to data users about changes to variable names and definitions, or other issues identified during the production process.

The Census Bureau welcomes the comments and advice of data users. If you have comments, please email: kathryn.c.shantz@census.gov.