09 Apr Have there been any changes to the exit tax?

Q. On the exit tax, have there been any changes in the law for what I have to file for my 2024 tax return? We moved out of New Jersey in September 2024 and are filing a joint tax return. How does it work?
— Taxpayer

A. We’re sorry to hear you left the Garden State.

The so-called “exit tax” isn’t really a separate tax.

It’s actually an estimated tax payment that certain individuals must make when selling property in New Jersey and moving out of state, said Martin Hauptman, partner in the trust and estates and tax law practice groups at Mandelbaum Barrett P.C. in Roseland.

This requirement ensures that New Jersey collects any applicable taxes on the gain from the sale of property by nonresidents, he said

As of April 2025, there have been no specific changes to the exit tax affecting your 2024 tax return.

“The most recent legislative updates pertain to other areas, such as adjustments to the Sales and Use Tax rates on zero-emission vehicles and changes to the Corporation Business Tax Act,” Hauptman said. “These do not impact the `exit tax’ requirements for individual taxpayers. ​

Given that you and your spouse moved from New Jersey to Washington in September 2024 and are filing a joint tax return, you are considered part-year residents for the 2024 tax year, Hauptman said.

“When selling your New Jersey property, you were required to make an estimated tax payment,” he said. “This payment is typically the greater of 8.97% of the gain from the sale or 2% of the total selling price. This withholding ensures compliance with New Jersey tax obligations upon leaving the state.” ​

As part-year residents, you should file Form NJ-1040NR, the New Jersey Nonresident Income Tax Return, for 2024, Hauptman said. This form allows you to report income earned while you were residents and any income derived from New Jersey sources after your move, he said.

“On this return, report the actual gain or loss from the sale of your property,” he said. “The estimated tax payment made at closing will be credited against your total New Jersey tax liability. If the estimated payment exceeds your actual tax liability, you may be eligible for a refund.”

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This story was originally published in April 2025.

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