40% of households will pay no federal income tax this year. Why that’s good news.

Millions of workers are bouncing back — and making enough money to pay Uncle Sam. Some 72.5 million households or 40% of households will pay no federal income tax this year, down from the pre-pandemic high of 60% two years ago, according to new estimates from the Tax Policy Center.

In 2021, nearly 56% of households or 99 million households paid no federal income tax, down from 60% or 100 million households in 2020, the nonpartisan think tank’s said in the report.

Massive job losses in the pandemic’s early stages sent millions of people to unemployment lines and temporary rules exempted much of 2020 jobless benefits from income taxes, Howard Gleckman, senior fellow at Tax Policy Center, said.