29 Mar Do I owe tax on the sale of my home after I moved?

Q. I moved out of my house in New Jersey on Jan 1. 2021 and became a Florida resident on that day. My 2021 and 2022 tax returns are married filing separately. My soon to be ex-wife at the time remained there. My divorce and subsequent sale of the house were in the fall of 2023, so I qualify for the $250,000 deduction as it was my primary house for two out of the last three years. Do I owe New Jersey tax on the gain from the sale of the house, even though I have not filed a New Jersey return for two years and I am not a resident there. If so, what are the tax rates? No money was withheld by the closing agency — no exit tax — as the docs mistakenly showed I was a resident and a 1099 for my part of the sale was filed.
— Seller

A. The Garden State is sorry to see you go.

You said the sale of your New Jersey home was a qualified personal residence.

“If this is the only New Jersey source income, then it is not taxable, assuming your share of the capital gain is below the exemption threshold,” said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston. “As such, you would not be required to file a New Jersey state income tax return.”

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This story was originally published in March 2024.

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