I left N.J. for Florida. How do I get the exit tax back?

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Q. I have lived in my New Jersey home for 17 years. I sold the home in August and moved to Florida, where I am now a resident. The profit is less than $500,000 federal exemption allowed for a joint return. But there was an exit tax paid at closing. I would like to have this tax refunded. My understanding is that I must file a NJ1040 non-resident return. I did this, but do not see where to enter this on the form. Can you help?
— Seller

A. Congrats on your move.

Jersey will miss you.

But let’s get something straight. There is no such thing as an exit tax.

The tax you’re talking about is an estimated withholding required upon the same of a home. It’s New Jersey’s way of making sure that people leaving the state will pay the taxes they owe after a sale.

The tax is fully refundable if a taxpayer does not have any New Jersey gross income, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

“If your sale qualified for the federal exemption, it would qualify for the same exemption for New Jersey tax purposes,” he said. “The tax gets entered as withholding tax, but please confirm with the attorney or title company that handled the closing that they remitted the tax to New Jersey.”

You will have to file NJ-1040 as a non-resident and include the withholding tax on Line 50 of the 2022 tax form, he said.

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This story was originally published on March 10, 2023.

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