[vnathan]

I moved from New Jersey to Texas beginning January 1, 2009. My wife still works in NJ. Initially in 2009 for a few months NJ state tax was withheld by my employer as I had left my permanent address as NJ for few months even though I had maintained residence in Tx all of 2009, with a Tx address. Around February 2009 I got my Tx driver's license. I am planning on filing NJ tax return as a married filing separately and NJ non-resident. My wife will file as married filing separately also but as NJ resident. I am planning on requesting refund of the NJ taxes withheld by employer in my state tax return. Is this appropriate and are there likely to be any issues?

[ebaines]

You sound just like me! I moved from NJ to TX back in '02, and maintained a home in both states while my wife continued to work in NJ.

Your plan sounds good. NJ usually requires married couples to file with the same status as your federal income tax (which I assume you are filing as Married filing Jointly). However, if one person was a non-resident for the entire year and the other was a resident for the entire year you are allowed to file separately - as documented on page 7 of http://www.state.nj.us/treasury/taxa...gi-ee/git6.pdf

[vnathan]

You sound just like me! I moved from NJ to TX back in '02, and maintained a home in both states while my wife continued to work in NJ.

Your plan sounds good. NJ usually requires married couples to file with the same status as your federal income tax (which I assume you are filing as Married filing Jointly). However, if one person was a non-resident for the entire year and the other was a resident for the entire year you are allowed to file separately - as documented on page 7 of http://www.state.nj.us/treasury/taxa...gi-ee/git6.pdf

Thank you for responding, Ebaines. MY question is also -- How do I prove I was resident of TX the entire year? I did move to Tx January 1st. But I got my TX drivers license only in February. My employer withheld NJ taxes through March. Will there be any issues because of that? I, naturally want to get back the withheld taxes.

[ebaines]

No need to "prove" it, unless asked. Your drivers license helps - it clearly shows your intent to be a TX resident. If you are renting in TX - hang onto your lease papers that show your Jan 1 start date. Make sure all your tax correspondence uses your TX address - including your federal return. You might also ask your employer for a letter documenting that you transferred to TX Jan 1. Final suggestion: keep records of your trips back and forth to NJ (assuming you go back there occasionally) such as airline boarding passses - to show that you spend less than 180 days in NJ. As for the withholding of NJ tax - since you'll be filing separately your return will show $0 NJ source income and you should get all your withholding back.

[vnathan]

No need to "prove" it, unless asked. Your drivers license helps - it clearly shows your intent to be a TX resident. If you are renting in TX - hang onto your lease papers that show your Jan 1 start date. Make sure all your tax correspondence uses your TX address - including your federal return. You might also ask your employer for a letter documenting that you transferred to TX Jan 1. As for the withholding of NJ tax - since you'll be filing separately your return will show $0 NJ source income and you should get all your withholding back.

Thank you again. Are you saying that even for my federal taxes I should use TX address? That will be a joint file with my wife and I thought I could use the NJ address, particularly since there is a chance that might move back to NJ. DO you see an issue with that?

[ebaines]

Yes - I do see an issue with it, although it's a minor point. Remember, it's in NJ's interest to claim you as a resident. If your federal return says that your address is NJ, that would seem to support the contention that you didn't really move out of state. The feds don't care what address you use - so what's the down side?

[vnathan]

Thank you. If I understand you right, you are saying why not use the Tx address since Feds don't care, and there is a small chance of NJ contesting my residency status if I use the NJ address in the Fed return. I should use the Tx address for Fed. I just have this practical issue of having these communications received at a permanent address. But I see your point.

[ebaines]

You're absoluteley going to want to use a TX address for your personal NJ return. If you're TX home is a Residence Inn or the like, I can understand the concern. But if you're actually renting an apartment it shouldn't be an issue. You need to have a PO box at least - so that if/when you move back to NJ you can leave a forwarding address.

[vnathan]

You're absoluteley going to want to use a TX address for your personal NJ return. If you're TX home is a Residence Inn or the like, I can understand the concern. But if you're actually renting an apartment it shouldn't be an issue. You need to have a PO box at least - so that if/when you move back to NJ you can leave a forwarding address.

Ebaines, when you moved to Texas by yourself, how long did you live there before moving back? A tax consultant I spoke to is cautioning me that if my intention is to move back sooner or later, then I will still be considered NJ Resident for tax purposes. It is confusing. I thought I had clear evidence on paper for non-residency during 2009 and that is all that mattered. Would appreciate if you had any further thoughts on this.

[ebaines]

Ebaines, when you moved to Texas by yourself, how long did you live there before moving back? A tax consultant I spoke to is cautioning me that if my intention is to move back sooner or later, then I will still be considered NJ Resident for tax purposes. It is confusing. I thought I had clear evidence on paper for non-residency during 2009 and that is all that mattered. Would appreciate if you had any further thoughts on this.

"Intent" is a very subjective thing, and "sooner or later" is a very vague term that can mean years. I think if your full time job is in TX, if you've estabished residency there, and if you have no definite plans to move back, then you're a TX resident. It would be different if you knew that you're moving back in the next couple of months. In my case I established residency in TX in March, 2002, and used that as my tax state even though I still owned a home in NJ, my wife was still working there, and the NJ house is where where the kids would come on vacations from college (and still do for holiday family get-togethers). My "intent" was to keep that job in TX (and actually now IL) for the foreseeable future, but "someday" I have always intended to move back to NJ. Here it is 8 years later, and while I may intend still to move back "sooner or later" I think it's safe to say I am not an NJ resident. Hope this helps!

[vnathan]

Thank you. In your case, I can see that you have passed the non-residency test. You never moved back.

I do see the possibility of going back this year. If that happens, would that essentially weaken my rationale for non-resident filing?

Thanks again for your interest.

[vnathan]

"Intent" is a very subjective thing, and "sooner or later" is a very vague term that can mean years. I think if your full time job is in TX, if you've estabished residency there, and if you have no definite plans to move back, then you're a TX resident. It would be different if you knew that you're moving back in the next couple of months. In my case I established residency in TX in March, 2002, and used that as my tax state even though I still owned a home in NJ, my wife was still working there, and the NJ house is where where the kids would come on vacations from college (and still do for holiday family get-togethers). My "intent" was to keep that job in TX (and actualy now IL) for the foreseeable future, but "someday" I have always intended to move back to NJ. Here it is 8 years later, and while I may intend still to move back "sooner or later" I think it's safe to say I am not an NJ resident. Hope this helps!

Did you have to wrestle with issues like TX being a community property state (implication being half of TX income having to be included in spouse's NJ income)? Just another issue in the same context. Wondering if you had to consider it. Thanks.

[ebaines]

Never thought about it! I would argue that if that's the way community property works, then half my TX income is my wife's TX income, not her NJ income. It is not NJ source income, so I don't see how NJ can lay claim to it.