If there was a gain on the house sale, then yes you will file a SC return. Since the property is located in SC, and since the sale of primary residence exclusion does not apply (hasn't lived there in 5 years), any gain on the home is taxable, which means that SC can tax the income because the property was located in SC. NJ also taxes the income but will give a credit for taxes paid to SC to reduce the effect of double-taxation. To have the credit for SC taxes transfer over to the NJ return, prepare the SC return first.
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