Personal Taxes

In accordance with Pew evaluation, New Jersey individuals’s personal earnings elevated within the third quarter of 2020, pushed by help applications

Personal income in New Jersey rose amid the pandemic, despite widespread job losses and business shutdowns, an analysis by the Pew Charitable Trusts found.

Personal income in the third quarter of 2020 – that is, compensation excluding capital gains – was 7.3% higher than the same time last year, outperforming gains in neighboring New York and Delaware by 4.6% and 4.4%, respectively.

Pennsylvania’s personal income grew the fastest among New Jersey’s neighbors, at 8.3%, although New Jersey still surpassed the national average of 5.9%.

The researchers attributed much of the growth to higher government subsidies – such as the expansion of unemployment insurance – and New Jersey was one of only seven states where government transfer payments rose more than 50% over the same period in 2019 .

However, earnings also rebounded after falling sharply in the second quarter. This was found in an analysis by Pew, which found that federal aid funds responsible for the surge were being provided. Overall, New Jersey’s third quarter growth was the country’s 10th fastest. Wyoming had the slowest personal income growth rate at 0%.

The garden state also saw a more modest decline in tax revenues than that of its neighbors.

Here, tax revenues fell by 1.9% in the last financial year. New York was down 8.9%, while Pennsylvania revenues were down 7.5%, while Delaware tax revenues were down a relatively modest 3.5%.

It’s not clear how New Jersey officials’ decision to extend the previous discal year by three months affected Pew’s numbers, which measured changes in tax revenue between Q1 and Q2 2020.

New Jersey identified its first case of COVID-19 on March 4, and Governor Phil Murphy signed an executive order on March 16 that closed most of the state’s business.

In New Jersey, comparisons with declines in sales in Pennsylvania and Delaware may become less favorable over time. Tax revenues in these states have been reduced due to delays in deadlines for filing income taxes.

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