The latest Internal Revenue Service data shows a net outflow of nearly $2.8 billion in Individual Tax Return Adjusted Gross Income (AGI) for tax year 2022-2023.
That figure is 47% lower than the record net outflow of $5.2 billion in tax year 2021-2022.
With this latest IRS data, however, New Jersey’s total non-inflation-adjusted net loss of AGI is approximately $48.25 billion dating back to tax year 2004-2005.
“While there are always different outlooks on New Jersey’s broader population trends, New Jersey’s net loss of AGI continues to be a concern,” said NJBIA President and CEO Michele Siekerka.
“The downstream economic effects of migration are not quite as simple as AGI-in versus AGI-out. But the potential loss of taxable income and available spending power in the state should very much be considered by policymakers as New Jersey continues to struggle with a lack of affordability, extremely high costs of living and business policies that make it more challenging for our job creators to thrive and provide careers.”
AGI is a measure of income that calculates how much total income is taxable. So, its importance is found in the fact that the continued net loss in AGI literally results in less taxable income for the state.
For 2022-2023, the outflow of U.S. and foreign adjusted gross income from New Jersey was approximately $14 billion, compared to an inflow of $11.2 billion, according to IRS figures released last week.
In 2021-2022, New Jersey’s AGI outflow was a record $17.6 billion, but its AGI inflow was $12.4 billion.
Perhaps not surprisingly, former New York residents who moved to New Jersey provided the most positive AGI inflow at $5.11 billion in 2022-23, compared to +$2.7 billion in 2021-22.
Rounding out the Top 5 states for inflow of AGI to New Jersey were Pennsylvania (+$1.39 billion), Florida (+$785.3 million), California (+$668.3 million) and Massachusetts (+$318.4 million).
New Jersey’s largest AGI losses were to New York (-$2.97 billion), Florida (-$2.96 billion), Pennsylvania (-$1.56 billion), California (-$821.1 million) and Texas (-$679.2 million).
“Despite some broader losses, the New York pipeline is an overall net win for New Jersey,” said NJBIA Research Analyst Jack Ramirez. “More than 73,000 New Yorkers moved to New Jersey, compared to about 39,000 heading the other way.
“Notably, New Jersey gained $5.1 billion in AGI from New York while losing nearly $3 billion. This $2.15 billion net gain reinforces New Jersey’s role as a key extension of the New York metro economy.”
Ramirez added that Florida continues to be a landing spot for New Jerseyans, rather than the other way around.
“Nearly 35,000 New Jersey residents relocated there, compared to just 14,000 moving north,” Ramirez said. “Florida alone accounts for over 16% of New Jersey’s total population loss, which highlights the ongoing pull of lower taxes and warmer weather.”
