September 25, 2020
Bottom Line: California income tax withholding surged this week, as collections were 40 percent above the comparable week in 2019. Total collections since late March remain are now nearly 2 percent above the comparable period in 2019.
The second graph shows total withholding collections since Monday, March 23, when we first started to see evidence of an impact of the pandemic on withholding. As shown in the graph, total collections between March 23 and September 25 are up 1.9 percent ($651 million) compared to the same period in 2019. Last week, the tracker showed an increase of 0.7 percent ($234 million).
The final graph shows the year over year changes in cumulative withholding for California in 2020, the United States in 2020 (from the federal income tax), and California in 2009 at the trough of the Great Recession. California’s withholding picture has improved lately, unlike federal withholding this year or the state’s own withholding at the same stage in 2009. While California’s economy has been hurt at least as badly by the recession as the national economy has, its withholding collections have likely held up better because its income tax falls more heavily on the higher-paid workers who have experienced fewer employment losses than their lower-paid counterparts. Federal withholding this week was up 1 percent from 2019, and the comparable week in California in 2009 was up 24 percent from 2008.