When will I get a refund of the exit tax from my home sale?

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Q. I have submitted my 1040 forms for the return of my exit tax. When should I expect my refund?
— Taxpayer

A. The coronavirus pandemic slowed down the processing of tax returns.

The IRS reportedly had a backlog of as many as 23 million pieces of mail at one point earlier this year due to the pandemic.

And while there were some earlier slowdowns for the state Division of Taxation, it appears to have been processing 2019 income tax refunds at a steady pace, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Holmdel.

He said the “exit tax” refers to an estimated tax paid at closing upon the sale of real estate by a New Jersey nonresident.

Your Form NJ-1040NR should be processed no differently than any other income tax return received by the Division of Taxation, he said.

“If you filed electronically and requested your refund via direct deposit, it might only take a few weeks to receive a refund,” he said. “Filing electronically and requesting your refund via check adds additional time.”

Completing a paper income tax return might delay receipt of your refund for a few months.

You can use the state’s Where’s My Refund? tool to get an update on your return.

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This story was originally published on Dec. 8, 2020.

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