Do I have to tell New Jersey I’m moving to Florida?

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Q. Is there an actual form you have to file with the State of New Jersey to formally tell them you are changing your domicile? I’m in the process of moving to Florida and I know there’s a form I have to file there.
— Outta here

A. Congrats on your move to Florida.

There is not a specific form that you need to file with New Jersey to formally state your intention to change your domicile.

There are, however, some actions that you should take to have evidence to support your move, said Ken Van Leeuwen, a certified financial planner with Van Leeuwen & Company in Princeton.

“If you spend time throughout the year in both Florida and New Jersey, you must clearly indicate your intention to move your domicile to Florida by establishing some important relationships within the new state,” Van Leeuwen said.

As you mentioned, you will have to file a Florida Declaration of Domicile, which declares your intention to maintain a Florida residence as your permanent home.

Then it’s time to get the records to support your domicile change.

These include obtaining a Florida driver’s license, vehicle and boat registrations, voter registrations and transferring New Jersey bank accounts to Florida bank accounts, he said. You will also want to file final income tax returns in New Jersey.

You can then notify both federal and state tax authorities of the move to Florida by filing IRS Form 8822. After filing the form with the IRS, a copy can be sent to the N.J. Division of Taxation at P.O. Box 440, Trenton, N.J. 08646-0440 to specifically notify New Jersey tax officials.

You should also update your estate plan to conform to Florida laws, he said.

It’s also important to understand how New Jersey considers residency if you plan to spend time in both New Jersey and Florida.

“If you maintain a residence in New Jersey and return to the state for more than 183 days during a calendar year, you will be considered a statutory resident even if you have successfully established domicile in Florida,” Van Leeuwen said. “This means all of your income would be subject to New Jersey state taxes.”

If you are maintaining residencies in both states you will want to be sure to keep accurate records of your time spent in each state to protect yourself from paying these taxes, he said.

If you plan on selling your New Jersey home, there is another factor to consider: the so-called exit tax.

This is not an extra tax, but an estimated tax home sellers must pay. It’s one of New Jersey’s ways of making sure you don’t leave the state and run – but you can get back these funds when you file your final state tax return.

The exit tax requires sellers of New Jersey homes to pay state tax in advance of moving – either 8.97% of the profit on the sale of their home or 2% of the total selling price – whichever is higher, he said.

“There is an exemption to this rule under Internal Revenue Code Section 121,” he said. “IRS Section 121 makes gains on the sale of a primary residence exempt from capital gains if the homeowner has used the home as their primary residence for 24 of the last 60 months.”

Exemptions for these gains are up to $250,000 for single taxpayers and $500,000 for those who are married filing jointly, he said.

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This story was originally published Nov. 29, 2019.

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.