@rryanc25 wrote:
Thank you for the thorough response. My understanding is that I will file a part year resident NJ return for the beginning of the year and then a non-resident return for the remainder of the year. I'm thinking the NJ-1040NR column B should include $0 income - as I did no work physically in NJ - triggering a refund of any excess taxes paid.
Am I following that correctly?
Is it possible to have my NJ employer stop withholding NJ taxes once I relocate?
Thanks again!
Yes, it does appear that if you move out of NJ during the year, but continue to have NJ-sourced income, you file both a regular tax return and an NR tax return.
https://www.state.nj.us/treasury/taxation/njit26.shtml
Your regular return will list all the income earned or paid while you are domiciled in NJ, even if you were working or living somewhere else temporarily. This includes wages, but also investment income, bank interest, and so on. You will have to manually allocate each source of income in Turbotax. You also report all your NJ withholding, and get a refund or owe additional tax depending on how the math works.
If you have no NJ-source income after changing your domicile, there will be no reason to even file an NR return. You would only file this return if you have NJ-sourced income after changing your domicile. This could include selling real estate (if you sold your house after the date you changed domiciles) or wages, if you were required to work in person for a short period. Since you will have claimed all your NJ withholding on your regular return and gotten a refund if owed, any tax calculated on your NR return will have to be directly paid, since there is no withholding to offset it.
Since NJ does not have a convenience of the employer test for people living in South Dakota, you should be able to stop your NJ withholding once you move, but you will have to ask your employer.
