topic Change of State and Stock Sale in State tax filing

Change of State and Stock Sale

MyName — Fri, 13 Dec 2019 19:21:11 GMT

I lived in NJ until October 2019 when I moved to PA.

I may sell stock now in December 2019.

Which state tax form will have the effect of the stock sale? I realize I will have two states to file for 2019.

Re: Change of State and Stock Sale

RachelW33 — Fri, 13 Dec 2019 19:56:14 GMT

Yes, you are correct, you will need to file a part-year tax return for both NJ & PA in 2019. If you sell stock in December 2019, the profit or loss from the sale will be allocated to your PA return, since that is where you will be living when the stock is sold.

Re: Change of State and Stock Sale

TomYoung — Sat, 14 Dec 2019 14:42:20 GMT

However, be aware that there can be NJ tax implications if the stock was acquired via an employee stock incentive program. In this case if the acquisition of the stock took place in 2019 and created "compensation", (e.g., a NonQualified Stock Option), or if the sale of the stock creates compensation, (e.g., a disqualifying sale of stock acquired via an Incentive Stock Option), then that compensation will be included with your NJ income tax return.

Re: Change of State and Stock Sale

MyName — Sat, 14 Dec 2019 14:51:37 GMT

This is an ESOP employee stock. The last purchase was over 10 years ago and all is qualified. All common stock of dividends was sold long ago, and I no longer reinvest. There is a discount price for the stock based on the employer plan at 5%. Does the sale then effect NJ tax form or just my new state of PA?

Re: Change of State and Stock Sale

MyName — Sat, 14 Dec 2019 14:50:56 GMT

And I no longer reinvest.

Re: Change of State and Stock Sale

TomYoung — Sat, 14 Dec 2019 20:00:57 GMT

"Does the sale then effect NJ tax form or just my new state of PA?"

Because you used the word "qualified" I'm assuming that you really meant "ESSP."

It's impossible to say without knowing all the facts. A qualified sale of stock acquired via an ESPP can create compensation. If you use the ESPP "guided" interview TT will make that determination.