Can N.J. tax my pension if I move to Florida?


Q. I currently collect a New Jersey state pension but I do not collect Social Security until next year. My wife currently works and will retire in about a year and collect a state pension, and she does collect Social Security. I also have $500,000 in a retirement plan. What taxes would I save if I move to Florida? Would I have to pay state taxes on income that comes from out of state? Does renting count as a domicile or do you have to own your home?
— Retired

A. We’re glad you’re asking all these questions before you make a move.

Let’s go through them one at a time.

The state of Florida currently has no personal income tax whatsoever, therefore you would save any taxes that you may be responsible for in New Jersey based on your personal situation, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.

But, he said, if the joint income for both you and your wife in retirement, excluding any Social Security income, New Jersey municipal bond interest or federal government bond interest is below $100,000, you would be eligible for the New Jersey pension exclusion.

“Since Social Security is not taxed by New Jersey anyway, if your pension and 401(k) distributions were less than $100,000 per year and you had no other income, you would not be liable for any state income tax in New Jersey,” Gallo said. “If this was the case, there may be no savings for state income taxes by virtue of a relocation to Florida.”

If you did move to Florida, New Jersey wouldn’t tax your pension.

Gallo said that this time, neither New Jersey or Florida have an estate tax, so there are no savings to be had. However, New Jersey does still have an inheritance tax on certain beneficiaries, so the importance of this will be based on who your beneficiaries are.

You would still be subject to federal taxes if you move to Florida

Being a renter would be just fine, as long as your other documents and accounts are in order. Gallo said, including a state driver’s license, voter registration and staying in the state for the proper number of days — that varies by state.

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This story was originally published on March 9, 2021. 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.

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