04 Jun Can N.J. tax me after I leave the country?
Photo: pixabay.comQ. I have accepted a position abroad. After 49 years as a New Jersey resident, I will be selling my home and leaving in July with no plans to return to New Jersey to live. What are my state tax burdens for 2018?
— Outta here
A. Good luck on your big move, and Jersey will miss you!
If you sell your property and no longer work here, the state can’t get its hands on your money when it comes to taxes.
The residency and, therefore, taxability to any state is based on your nexus to that state, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.
Karu said once you move out of New Jersey, you would no longer have nexus unless you own rental real estate, a share in a business or personal residence.
“Assuming you sell your house prior to moving and have no other source income coming from New Jersey, your residency would cease as of the date that you leave New Jersey,” he said. “You would pay taxes to New Jersey based on your earnings from January 1 through the date that you leave.”
Based on your timing, if you leave at the end of July, you would be a part-year New Jersey resident for seven months, Karu said. So unless you have business or rental income sourced from New Jersey, you would not be liable for New Jersey gross income tax in future years.
But, he said, you still will be liable for U.S. federal income tax on your worldwide income.
“However, there are foreign credits and exclusions available to you,” he said. “When and if you return to the United States, you would become a resident of whichever state you relocated.”
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