24 Apr I own in Florida and rent in N.J. How am I taxed on my income?

Q. I have owned a home in Florida for more than two years. My employer is located in New Jersey, and I work there and rent an apartment in New Jersey. The only reason I am renting in New Jersey is that my employer wanted everyone to show up to the office after the pandemic. How do I go about taking a tax credit since Florida has no state income tax? Or do I just file a non-resident tax return with New Jersey?
— Confused

A. Domicile and residency are the issues in question here.

In New Jersey, residency is determined by where you are domiciled during the year.

If you are not domiciled in New Jersey, but received source income in New Jersey, you may need to file a nonresident tax return, said Ann Marie Perry, a certified public accountant with Peapack Private Wealth Management in Summit.

Source income means the money you earned in New Jersey, she said.

“Domicile is the place and state you consider your permanent home — the place where you intend to return after a period of absence,” she said. “You have only one domicile, even though you may have more than one place to live.”

The New Jersey Division of Taxation considers many factors when determining if New Jersey is your domicile, Perry said. These include:
· Your intent;
· Where you register to vote;
· Your driver’s license and vehicle registration;
· Where you have family ties
· Whether your federal tax return lists NJ as a home address;
· Location of bank accounts

If New Jersey is your domicile, you are considered a resident for New Jersey tax purposes unless you did not maintain a permanent home in New Jersey, you maintained a permanent home outside New Jersey and you did not spend more than 30 days in New Jersey.

Perry said if New Jersey is not your domicile, you are only considered a resident if you maintain a permanent home and spend more than 183 days here.

Based on the information you provided about maintaining an apartment in New Jersey for work purposes, it sounds as though you are spending more than 183 days in New Jersey. The apartment is considered a permanent home even though you don’t own it, she said.

“If the final determination after considering the above parameters is that you are a New Jersey resident for tax purposes, you would file a New Jersey resident Form NJ-1040,” Perry said. “Since Florida does not have a personal income tax, you will not pay taxes in Florida on the New Jersey wage income, therefore, there is no state credit to apply for in Florida.”

You should speak to a qualified tax preparer who can review all your specifics before you make final decisions on your returns.

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This story was originally published on April 24, 2023.

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.