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New Jersey is one of 22 states that experienced a net loss of adjusted gross income –including a net loss of 1,833 taxpayers with AGI over $200,000 – between 2019 and 2020, according to new IRS tax data analyzed by the Tax Foundation.

The IRS migration data shows the movement of taxpayers between states based on changes in their mailing address between filing one year’s income tax return and the next. Although migration data provided by moving companies offers a timelier snapshot, the IRS data shows the movement of income by tracking adjusted gross income (AGI) of taxpayers moving from one state to another. 

New Jersey’s total net loss of AGI was $2.3 billion, according to 2019-2020 federal tax return migration data, the Tax Foundation analysis found.

The IRS data shows 28 states experienced a net gain in income tax filers from interstate migration—led by Florida, Texas, Arizona, North Carolina, and South Carolina. Meanwhile, 22 states and the District of Columbia experienced a net loss—led by New York, California, Illinois, Massachusetts, and New Jersey.

Katherine Loughead, senior tax policy analyst for the Tax Foundation, said Tuesday that people move for many reasons, but the 2019-2020 IRS migration data shows a strong relationship exists between state tax competitiveness and inbound migration.

“Overall, states with lower taxes and sound tax structures experienced stronger inbound migration than states with higher taxes and more burdensome structures.”

Of the 10 states that experienced the largest gains in income taxpayers, five do not levy individual income taxes on wage or salary income at all, and two others had top marginal individual income tax rates that were below the national median at the time, Loughead said. Nine of the top 10 states either forgo individual income taxes on wage and salary income, have a flat income tax, or are moving to a flat income tax.

“One reason policymakers should care about their state’s interstate migration patterns is the effect of interstate migration on tax revenue, economic output, and economic growth over time,” Loughead said.

According to the analysis, the IRS data on interstate migration broken down by AGI, shows that the top interstate moves among taxpayers with $200,000 or more in AGI were to Florida, Texas, Arizona, North Carolina, and South Carolina.

Between 2019 and 2020, most states, including New Jersey, that experienced a net loss in income tax filers attributable to interstate migration also experienced a net loss in income associated with interstate migration, Loughead said. New Jersey’s population change, showing the loss of individuals as share of state’s 2019 population estimate, was -0.26% and its AGI decline was -0.60%.