02 Feb Will I have to pay the exit tax when I sell my N.J. home?
Q. My primary home is in Florida. I also had a home in New Jersey that I’ve owned since February 2014. I paid $228,000 for this home and have made over $90,000 in improvements to the property. I sold it this year for $315,000. I intend to stay with my son in New Jersey during the summers instead of owning a home in New Jersey. Will I have to pay the exit tax?
A. The exit tax is greatly misunderstood.
It’s not a special tax charged against people who sell their home and leave the state.
“The state does mandatory withholding on a sale of property if you are not a New Jersey resident, and if you don’t owe the tax, you are refunded the withheld amount,” said Kenneth Bagner, a certified public accountant with Sobel and Co. in Livingston.
He said you can ask for a refund when you file your non-resident New Jersey tax form.
“If you don’t want to wait, you can file a Form A-3128 to claim an early refund after the closing, along with proof of overpayment,” Bagner said.
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This story was originally published on Feb. 2, 2021.
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