Q. If I purchase a home in Florida and establish it as my primary home by living there for minimum of 185 days and become a Florida resident, how does this impact my New Jersey income tax if I keep my New Jersey home as a second home? I have a New Jersey pension.
— Thinking about it
A. You’re right to make sure you understand the tax consequences of such a move.
If you’re a nonresident, New Jersey can’t tax everything.
“New Jersey only taxes earned income of nonresidents such as income from a business operating in New Jersey or compensation for services performed in New Jersey such as wage,” said Len Nitti, a certified public accountant with Wilkin & Guttenplan in East Brunswick. “Income like interest, dividends, capital gains and pension income is not taxable for a nonresident.”
When owning a home in New Jersey, there are two considerations in determining of which state you are a resident, Nitti said.
He said one test is a mechanical test which is determined by New Jersey statute. It says you are a resident of New Jersey for any year in which you spend 183 days or more in the state while owning a New Jersey home.
The second test is a more subjective one. It considers where are you domiciled or where is your permanent home.
“There are a number of factors considered by New Jersey in determining which state is your domicile including which state issued you a driver’s license, where are you registered to vote, what do you use as a mailing address, where are your valuable kept, size of the two homes, where are your banking and community relationships, are you claiming for any New Jersey property tax benefits, etc.” Nitti said
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