New Jersey's so-called "exit tax." How do I get a refund?
NJMoneyHelp.com weighs in with a good question regarding the #ExitTax.
Q. I will be 70 in a few months and I just relocated from New Jersey to Michigan four years ago. I recently sold 10 acres of raw, unimproved land in the Pinelands for $11,079. An “exit tax” in the amount of $220.84 was withheld. As a nonresident of New Jersey, I’m not sure what I need to do for my taxes.
— Former Jersey boyA. We’re sorry to hear you left the state.
You would need to file a New Jersey non-resident return showing the gain — not the proceeds — as New Jersey sourced income, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.
— Former Jersey boy
“The amount of New Jersey tax calculated on the gain would be compared to the amount of New Jersey income tax withheld, and a refund or additional amount would be due based on the difference between the two,” he said.
Hook said you would also report the gain on your Michigan tax return.
“You would be able to take a tax credit on your Michigan tax return for the amount of New Jersey tax liability to avoid being doubly taxed for state tax purposes,” he said, noting you would report the gain for federal purposes on Schedule D.
Email your questions to Ask@NJMoneyHelp.com.
This story was originally published on April 14, 2021.
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.
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