23 Jun Can NJ tax my accounts after I move?

Q. You said in a recent story that if you’re a non-resident of New Jersey, only the income earned from New Jersey sources is subject to the state’s income tax. I’m thinking of moving to Florida where there is no state income tax. The total value of my IRAs is from money that was earned in New Jersey. Would the value of my IRA be considered “income earned from New Jersey sources,” thus making it subject to New Jersey income tax even though I would be living in Florida?
— Planning

A. You’re in luck here.

IRA distributions received by a non-resident of New Jersey — even though the IRA was related to income earned when you were a resident of New Jersey — are not taxable in New Jersey.

“IRA accounts are treated similarly to pensions and annuities as it relates to the exclusions from income,” said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.

He said you can check Treasury’s bulletin on pensions and annuities for more information.

It wasn’t always this way. New Jersey used to tax the pensions of those who left the state.

“So for example, someone with a New Jersey pension who moved to Florida was still being taxed by New Jersey as a non-resident even though they no longer resided in New Jersey,” Hook said. “In 1996, a federal law was passed prohibiting states from doing this for distributions made after Dec. 31, 1995.”

The law covered pension plans as well as IRA accounts, he said.

So if you move, New Jersey won’t have its hand in your pocket.

Email your questions to .

This post was first published in June 2017.