Residence status

[aa2014]

Hello - 

We lived in NJ from Jan - August (8 months) then moved out of the country for the remaining 4 months. We earned some income during these 4 months as well.

However, we changed our address (with banks, etc.) to a family members place in NC for those 4 months.

1. Do we need to file both a resident and non-resident NJ return?

2. Should we file NC at all since we never lived there - it was essentially a mailing address (however some of our tax forms now have NC listed as the state). If yes, should we file as non-resident?

3. When turbotax asks if we live abroad, is the answer yes since we were abroad end of year?

Thanks!

[Anonymous_]

Perhaps @NCperson can answer this question.

[NCperson · Accepted solution]

@aa2014 you did not physically live in NC nor did you earn any money sourced from NC, so I don't see that filing an NC tax return is necessary

for example, if you had an income producing property in NC, then you would have NC sourced income. 

Just using an address in NC doesn't somehow cause your income to become 'sourced' in NC. 

https://www.ncdor.gov/taxes-forms/individual-income-tax/nonresidents-and-part-year-residents

[TomD8]

With regard to NJ:

Was your move to another country temporary, followed by a return to your NJ home?  Or did you actually move from NJ to the other country and make the new country your new main, primary home (your new domicile, in tax terminology)?

Your NJ tax filing status will depend on which of these circumstances applies.

[aa2014]

@TomD8 

We moved out of NJ permanently by selling our home as well.

[TomD8]

@aa2014 --

Then you are a part-year resident of NJ.  If you continued to have NJ-source income after your relocation, then (as you suspected) you must file both a part-year resident and a non-resident NJ return.  See page 5 of this NJ tax publication:

https://www.nj.gov/treasury/taxation/pdf/pubs/tgi-ee/git6.pdf

The publication also provides detailed filing instructions for your situation.

In the Personal Info section of TT, enter your State of Residence as "Foreign or U.S. Possession".  It's the last choice in the State of Residence drop-down list.  Your State of Residence for tax purposes is your State of Residence as of year's end.

[aa2014]

@TomD8 

Thanks. NJ filing is clear.

If I put in "foreign" as my current residence state, is it still ok to have NC as my "mailing address"?

[aa2014]

@NCperson 

Unfortunately, a small portion of my W2 wages got attributed to NC in my W2 (though nothing was withheld).

Does this mean I will need to file NC? Otherwise they might need an explanation as to why I'm not paying them anything even though my employer attributed some wages to them?

[TomD8]

"If I put in "foreign" as my current residence state, is it still ok to have NC as my "mailing address"?"

Yes.

Does this mean I will need to file NC? 

Personally, I wouldn't.  In actual fact you are not an NC resident and you have no NC-source income, and thus you have no legal obligation to file in NC.  If NC questions you at some later point, then you can explain what happened.

[NCperson]

@aa2014 I agree with @TomD8 

one question though: for the income attributed to NC, I'll take it that it was a payroll error.  Is that to be attribured to NJ or is it attributable to the period of time that you were no longer in the county.  My only point is is should be attributable to where it is supposed to be attributed, but that is not NC. 

[aa2014]

I think attributing that income to NJ would be best so i'll do that.

That way, i don't have to file NC at all.

Also, I'll attribute the full income as NJ resident, so I won't have to file a NJ non-resident return (apparently if i file a non resident return I'll have to physically mail it in, which i cannot do at this point).

Is this ok to do?

[aa2014]

@TomD8 , @NCperson 

Please let me know if I can attribute full year income as NJ resident so as to avoid filing as NJ nonresident at all?

[TomD8]

@aa2014 --

As per the NJ tax reference I cited earlier, if you had NJ-source income after you moved out of NJ, NJ wants you to file both a part-year resident and a part-year non-resident tax return.  The rule doesn't really make sense in your example, since if you file as a full-year NJ resident all your income gets taxed by NJ.  Why would they complain about that?  But nevertheless, the rule is there.