Methods and Assumptions of the 

CPS ASEC Tax Model and Imputing 

2020 Stimulus Payments

FCSM Conference

October 26, 2022

Daniel Lin

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Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views 

of the U.S. Census Bureau. The Census Bureau has reviewed this data product to ensure appropriate access, use, 

and disclosure avoidance protection of the confidential source data used to produce this product (Data 

Management System (DMS) number: P-7503840, Disclosure Review Board (DRB) approval number: CBDRB-FY21-

POP001-0183, CBDRB-FY21-POP001-208 and CBDRB-FY22-SEHSD003-050
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CPS ASEC Tax Model

• The CPS ASEC Tax Model estimates federal, state, and payroll taxes, 

and several tax credits for the Current Population Survey (CPS) 

Annual Social and Economic Supplement (ASEC)

• Provides post-tax income for the Income in the United States report

• Provides tax credits for the Supplemental Poverty Measures (SPM)

• First comprehensive documentation will be released soon

• Lin, Daniel. 2022. “Methods and Assumptions of the CPS ASEC Tax Model.” 

SEHSD Working Paper 2022-18. U.S. Census Bureau.

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2021 Public-Use CPS ASEC Tax Variables 

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Variable Definition

ACTC_CRD Additional child tax credit

AGI Adjusted gross income

CTC_CRD Child tax credit and other dependent credit

DEP_STAT Person index (A_LINENO) of filer who claimed this dependent

EIP_CRD Sum of Economic Impact Payment 1 (CARES Act) and Economic Impact 

Payment 2 (CRRSA Act)

EIT_CRED Earned income tax credit

FED_RET Federal retirement payroll deduction

FEDTAX_AC Federal income tax liability, after all refundable credits and Economic Impact 

Payments 1 and 2. 

FEDTAX_BC Federal income tax liability, before refundable credits

FICA Social security retirement payroll deduction

FILESTAT Tax filer status

MARG_TAX Marginal tax rate

STATETAX_A State income tax liability, after all credits

STATETAX_B State income tax liability, before credits

TAX_INC Taxable income amount

TAX_ID Tax unit ID number
Assumptions of CPS ASEC Tax Model

• All respondents 

• Are US residents for eligibility purposes

• Are full-year state residents

• Can work in the US

• Choose deductions that minimize taxes

• Take maximum available credits

• Only single, head of household, and married joint filers

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Tax Model Steps

• Construct tax filing units 

• Construct income

• Statistical match to IRS Statistics of Income (SOI) Individual Public-Use 

Microdata Files

• Federal and state tax calculation

• Determine filers and non-filers

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Tax Units

• CPS ASEC person and household files are transformed into tax units

• Tax unit is a group of people who files a single tax return together

• Filing Status

• Married filing jointly: units with two spouses 

• Head of household: units with single person linked with dependents

• Single: units with one individual

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Income Construction

• Person-level earned wages are used to calculate federal payroll taxes 

also known as Federal Insurance Contribution Act (FICA) taxes

• Adjusted Gross Income (AGI) is estimated for federal income tax 

calculation

• Follows IRS 1040 forms and schedules line by line

More

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Imputing line items from IRS microdata

• Match on characteristics to IRS Statistics of Income (SOI) individual 

public use microdata 

• Model line items from several 1040 supplemental forms that are not 

captured by CPS ASEC

• Inputs for AGI

• Itemized deduction line items

More

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Federal and State Taxes

• Tax calculation follows an iterative process

• First run of federal taxes

• Using imputed state and local taxes from IRS

• State taxes

• Using first run federal tax liabilities and credits

• Second run of federal taxes 

• Using newly estimated state tax liabilities

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Filing Requirement

• CPS ASEC tax model defines a set of filing requirements 

• Income above IRS filing threshold determined by age and filing status

• Positive Earned Income Tax Credit 

• Positive self-employment income

• Positive Additional Child Tax Credit

• Tax units that do not satisfy any of the requirements are presumed to 

be nonfilers in the tax model

• For 2020, additional requirements are imposed on receiving EIPs

More

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Comparison to IRS Benchmark

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2020 Stimulus Payments

• CARES Act – March 2020

• First Economic Impact Payments (EIP 1)

• CRRSA Act – December 2020

• Second Economic Impact Payments (EIP 2)

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2021 CPS ASEC Questions

• “Since April 1, 2020, have you or anyone in your household received a 

‘stimulus payment,’ that is the coronavirus (COVID-19) related 

Economic Impact Payment from the Federal Government?”

• “What was the amount of the stimulus payment(s) that you received 

for all the covered adults and children since April 1, 2020?”

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Imputing 2020 Stimulus Payments

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• The CPS ASEC Tax Model imputed the first and second Economic Impact 

Payments for the 2021 CPS ASEC.

• EIP 1 maximum payment

• $2,400 for Married filing jointly

• $1,200 for Single and Head of household

• Plus $500 per qualifying child

• Reduced by 5% of AGI over threshold

• EIP 2 maximum payment

• $1,200 for Married filing jointly

• $600 for Single and Head of household

• Plus $600 per qualifying child

• Reduced by 5% of AGI over threshold
Assumptions for 2020 Stimulus Payments

• Production model

• SS and VA recipients or responding yes to survey questions on receipt of EIP

• Upper Bound model

• All individuals eligible for EIP

• Lower Bound model

• Target aggregate count of single filers receiving EIP by official IRS tabulation

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EIP Imputation Benchmarks

(Bee, Hokayem, Lin 2021)

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EIP Imputation Benchmarks

(Bee, Hokayem, Lin 2021)

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Working Papers

• Comprehensive documentation of the CPS ASEC Tax Model

• Lin, Daniel. 2022. “Methods and Assumptions of the CPS ASEC Tax Model.” SEHSD Working 

Paper 2022-18. U.S. Census Bureau.

• Modeling 2020 Economic Impact Payments

• Bee, Adam, Charles Hokayem, and Daniel Lin. 2021. “Imputing 2020 Economic Impact 

Payments in the 2021 CPS ASEC.” SEHSD Working Paper 2021-18. U.S. Census Bureau.

• Modeling 2021 expanded Child Tax Credits

• Bee, Adam, Charles Hokayem, and Daniel Lin. 2022. “Modeling the 2021 Child Tax Credit in 

the CPS ASEC.” SEHSD Working Paper 2022-17. U.S. Census Bureau.

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Questions/Comments?

Daniel.Lin@census.gov

CPS ASEC Tax Model Documentation (forthcoming)

https://www.census.gov/library/working-papers/2022/demo/SEHSDwp2022-18.html

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