Don’t let N.J. take an extra tax bite

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Q. I have questions about establishing a domicile and the 183-day rule. For example, if I leave New Jersey at noon on any given day, does that count as one of the 183? And if I leave N.J. at 8 p.m. and spend the night in New York, and I return to N.J. at 7 a.m. the next day, how does that count? And what kind of documentation is necessary to prove that you were in or out of N.J.?
– Outward bound

A. It’s a great question, and something lots of snowbirds need to understand.

There are many factors used to determine your state of residency for tax purposes.

First, the state Treasury Department said you are a nonresident for tax purposes if you did not maintain a “permanent” home in New Jersey, and you did maintain a “permanent” home outside of New Jersey, and you did not spend more than 30 days in New Jersey.

You are also considered a nonresident if New Jersey was not your domicile, and you spent 183 days or less here, or New Jersey was not your domicile, and you spent more than 183 days here, but you did not maintain a “permanent” home here.

Gerry Papetti, a certified financial planner and certified public accountant with U.S. Financial Services in Fairfield, said you can have multiple residences but only one domicile.

Among the factors that determine your domicile: voter registration, driver’s license, car registration, where your children attend grade school, and where you conduct most of your important activities, including employment, membership organizations, places of worship, gyms or social groups, banking and your professional relationships with doctors, dentists, lawyers and CPAs.

So how do you get the proof?

There are many documents that can support when you’re out of the state, including phone records.

“Specially cell phone records as the phone company can actually confirm which cell tower the phone call was made from, Papetti said.

Other documents include hotel and restaurant receipts, travel documents and receipts, E-ZPass records, ATM records, utility bills indicating usage and credit card statements that show the location of the charges.

As for your hypotheticals?

“New Jersey counts when you spend any part of a day in New Jersey as one full day,” Papetti said. “Therefore, in your example where you leave New Jersey at 8 p.m. and spend the night New York and return at 7 a.m. the next day, it counts as two days in the state of New Jersey.”

Email your questions to moc.p1566335881leHye1566335881noMJN1566335881@ksA1566335881.

This post was first published in July 2017.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.