More than 42,000 millionaires live in Pa. and N.J. — and that number is growing

The number of millionaires in Pennsylvania and New Jersey may be on the rise.

That’s according to recently released Internal Revenue Service data that looked at 18,720 tax returns filed in Pennsylvania in 2020 with adjusted gross income of $1 million or more. That marks a more than 6.1% increase over 2019, when 17,640 such returns were filed in the commonwealth.

By comparison, the number of millionaires in New Jersey increased by 5.4% from 2019 to 2020. According to IRS data, 23,950 tax returns were filed in New Jersey with $1 million or more in adjusted gross income in 2020, up from 22,720 the prior year.

Both states saw even sharper increases in comparison to 2015. Pennsylvania recorded a jump of 31.3% from 2015 to 2020, while New Jersey had a 22.3% increase.

It’s unclear exactly why the population of high earners has risen in this area. One potential factor, however, is the migration of people to the Philadelphia area from more expensive cities such as New York and Washington, D.C., during the pandemic due to increased availability of remote work. (New York lost 730 millionaires from 2019 to 2020.) These transplants continue to play a role in driving up home prices in the region.

Across the country, households added $13.5 trillion in wealth in 2020. Business shutdowns led people to spend less on dining out and entertainment, and save more. Meanwhile, the stock market remained strong, primarily buoying wealthier people.

Nationwide, the number of millionaires increased even more rapidly than in Pennsylvania or New Jersey, jumping by 9.8% from 2019 to 2020, when 608,540 people reported earning an adjusted gross income of $1 million or more, according to the IRS data.

New Jersey and Pennsylvania ranked fifth and ninth, respectively, in terms of number of millionaires residing there in 2020.

Not surprisingly, California took the top spot with 109,480 millionaires, followed by New York with 54,370 millionaires. Next came Florida with 53,190 millionaires and Texas with 49,420 millionaires. The top four were followed by New Jersey, Illinois, Massachusetts and Washington state.

Closer to the bottom was the small state of Delaware, where there were 1,270 people reporting at least $1 million in adjusted gross income in 2020.

Millionaires, of course, represent only a small fraction of tax filers. They made up 0.2% in Pennsylvania and Delaware, 0.5% in New Jersey, and 0.3% nationwide.