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jagr068 · Mar 8, 2012, 11:17 PM

HI,

I need some help in terms of filing my state tax return for 2011. My situation:

I own a house, lived and worked in Virginia from January to end of November 2011.
I then moved to New Jersey for a job and started working from Dec 5 to Dec 31, 2011
I rented a condo for the month of December in New Jersey but I go back to Virginia during the weekend.

I have two W2s. One from Virginia and one from New Jersey
I have some capital gain from selling company stocks. Tax was already withheld.
I earned some interest from bank CDs
I have mortgage interest credit from my house in Virginia which I can claim

Question: How do I file taxes for Virginia and New Jersey? Should I file as residence for the Virginia tax return and as non-residence for New Jersey Tax return?
How do I report my W2s and other incomes (1099s) in each state return?

Thank you.

JOhn

ebaines · Mar 9, 2012, 07:17 AM

Since you started a job in NJ in December and live there the majority of the time (despite weekend trips to VA) you are now considered a resident of NJ. This assumes that your intention is to stick with this job and commuting arrangement for the long term. So for 2011 you file a part-year resident return with VA to cover your income earned from January 1 - December 4, and a part year resident return for NJ to cover income between December 5 and December 31. For each state you will report your total income for the full year and also which portion was earned during your period of residence. The math works out such that your tax rate is based on your total income, but that tax rate is applied only to the income earned while a resident of that state.

MukatA · Mar 9, 2012, 08:22 AM

For 2011 you are resident of Virginia. This state is also your tax home. So to Virginia you will report worldwide income including NJ income. If you paid taxes to NJ, claim credit for taxes paid to NJ.
You are part year resident of NJ. You will report income earned while present in NJ. If income earned in NJ is less than the NJ filing limit, you need not file NJ tax return except if you have a refund. Your U.S. Tax Return: Working or Living in Two or More states

ebaines · Mar 9, 2012, 08:45 AM

Originally Posted by mukata

If income earned in NJ is less than the NJ filing limit, you need not file NJ tax return except if you have a refund.

I must disagree. According to the instructions for form NJ-1040 (which is the form for both full and part-year residents) as a part-year resident you must file if total gross income for the full year from all sources is greater than $10K for single or married filing separately or $20K for married filing jointly.

jagr068 · Mar 9, 2012, 04:05 PM

Thank you for all your input. If I may ask one more question, and this is for 2012. How should I file next year's state tax then?

For 2012
I will have income only from NJ
I continue to rent the condo in NJ but commute during the weekend
I will keep my house in Virginia.

1) Does it mean that I will be a full residence of NJ for 2012, or I can still claim as Part year since I commute back to VA during the weekends (lets say live in Jersey from Mon - Thursday)
2) What I am trying to ask is can I still retain my principle residence as Virginia?

Thanks

John

ebaines · Mar 12, 2012, 02:14 PM

You would be a full year resident of NJ for 2012. The home in VA is considered a 2nd home, or vacation home, so no - you do not claim part year residence in both states. Again - I am assuming that your intention is to stay with the NJ job and the apartment for the long term - it's not just a temporary assignment.

As for your desire to maintain your prinicpal residence as VA - it seems to me that while your "principal abode" (in tax parlance) is NJ, there's no harm in thinking of VA as "home." But again from a tax persepective you have only one principal abode at a time - it does not change with each weekend trip to VA.

jagr068 · Mar 15, 2012, 08:01 PM

Thanks for all your help. I just started working on my tax returns and still a bit confused.

Recap - I live in Virginia From Jan - Nov 2011, W2 is from Virginia. I then moved to NJ and worked for the month of December, rent a condo. I have a W2 from NJ for the month of December.

I have no problem filing the federal return.

For the 2 states tax returns:
1) I will file as part year residence for the NJ tax return. I need to report all my income for the entire year correct?
2) Should I file as full year or part year residence for the Virginia Tax return given that I lived there for 11 month? I need to report all my income for the entire year (W2s fom Virginia and NJ) correct?

This last question is a stupid question.. I will use my NJ address for both VA and NJ state returns?

Thanks in advance for the clarification.

ebaines · Mar 16, 2012, 05:50 AM

1. Yes - part year resident return for NJ. You use form NJ-1040NR (it's called a non-rsident retun, but they use if for part year residents as well). You report all income for the year, but also show what portion of that income came to you in the time you were a NJ resident. The tax calculation uses your full year income to figure your tax rate, but applies that rate only to the income you earned while living and/or working in NJ.

2. File as a part-year resident of VA. You cannot be a resident of two different states at the same time, so since you are a resident of NJ for December that means you are not a resident of VA for December. Hence you were a part-year resident of VA. Like NJ, VA will require you to report all your income for the year, but will tax you only on income you made while living and/or working in VA.

3. I suggest using NJ as your mailing address for all. That address ought to match the address on the W2 from your new job.

jagr068 · Apr 5, 2012, 08:50 PM

Thanks again for all your answers. I am almost done with my tax returns. One question, can I claim rental payment on my NJ state tax return? I just need to enter "rental payment x 18%" in box 36a "Property Tax Deduction" on the NJ-1040 form, correct?

jagr068 · Apr 5, 2012, 09:11 PM

I apologize but I actually have 2 questions (in the previous message).

Again question #1:
Can I claim rental payment on my NJ state tax return? I just need to enter "rental payment x 18%" in box 36a "Property Tax Deduction" on the NJ-1040 form, correct?

Question #2:
Since I file part year residence tax returns for VA and NJ, do I need to provide a copy of the VA tax return when I send in the NJ tax return, and a copy of the NJ tax return for the VA tax return as well?

Thanks