Taxes

Why tax day is so crucial for state budgets

Collections can ‘make or break’ forecasts for the next fiscal year.
An Internal Revenue Service 2023 1040 tax form and instructions. (AP Photo/Peter Morgan, File)

State budget writers are waiting to see if recent stock market gains translate into higher-than-expected income tax collections this month and improve the fiscal outlook for the coming year.

Taxes paid on capital gains, such as profits from selling stocks, bonds and real estate, have a huge impact on budgets in states such as California, Connecticut, New Jersey and New York, which levy high taxes on ultra-wealthy residents who have significant non-wage income.

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