U.S. states cheer April income tax deluge but analysts urge caution

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U.S. states cheer April income tax deluge but analysts urge caution
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U.S. states cheer April income tax deluge, but analysts urge caution

CHICAGO - April, typically a big revenue month for U.S. states that levy personal income taxes, was especially robust this year, making up for subpar collections in prior months, but analysts cautioned the tax surge underscores how state budgets face greater volatility from federal tax law changes and the stock market.

Taxes on wages and investment income are a top revenue source for states that collect them. April is the most important revenue month due to the tax filing deadline and the tendency of taxpayers who owe money to wait until the last minute to pay. It is not yet clear how much of a role wages, capital gains or other factors played in spurring the higher income tax collections - and whether that level of revenue would be ongoing.

Based on a $1.5 billion April revenue increase, fueled largely by a 35.5 percent spike in personal income taxes, Illinois Governor J.B. Pritzker raised the state's fiscal 2020 revenue forecast by $800 million and yanked a proposal to reduce pension contributions.

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