Midway through the fiscal year, New Jersey’s income tax collections have fallen off track, Gov. Phil Murphy’s administration reported on Monday.

Revenues for the fiscal year that began in July are expected to grow 7.5 percent over last year but slowed to 2.1 percent through December. The slowdown is driven largely by underperforming gross income tax collections that are budgeted to increase 5.4 percent — or $824 million — compared with last year. Treasury data shows they have fallen 6.5 percent below last year’s collections.

At 6.5 percent through November, all revenues had been just slightly lagging that 7.5 percent target. The income tax was beating its goal.

The treasurer’s office, which closely monitors revenues, flagged the slowing revenue growth Monday, blaming it on federal tax deduction changes that limit breaks for state and local taxes, known as SALT.

“The capped federal SALT deduction may have prompted a change in tax planning behavior this year because it eliminated the incentive to prepay the estimated fourth quarter payment in December, which is due January 15,” the Treasury Department said in a statement.

The Treasury Department said New Jersey was not unique in seeing this drop-off and it expects to see a comparable bump in January collections.

“Like a number of other states, we saw a noticeable drop in Gross Income Tax collections for the month of December, which we believe is largely attributed to a timing shift in taxpayer behavior due to several changes in federal tax law," Treasury spokeswoman Jennifer Sciortino said. "While this may have reduced December’s income tax receipts, the collective wisdom is that it will also increase January receipts.”

Last fiscal year, New Jersey collected $15.2 billion in income taxes, and the administration projects it will bring in $16 billion this year, thanks to a new “mega-millionaires tax" on income over $5 million. The gross income tax is the state’s largest single source of tax revenue.

Another major tax, the sales tax, remains behind the governor’s projections — growing by 1.2 percent compared with 6.2 percent. The Corporation Business Tax, which underwent a big update in this year’s budget, has grown 60.8 percent versus this time last year, where it is projected to grow 47.2 percent.

“Corporate tax revenues are expected to grow significantly due to substantial state and federal tax policy changes that influence the tax base and the timing of certain payments," according to the Treasury Department.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.