In what cases would you have to pay Resident and Non resident state taxes for the same state (NJ) ?

[maglib]

For instance if you lived and worked in NJ for part of the year and then moved to another state yet still continued to commute for work to NJ.  You would be a resident until you changed your legal domicile, then you would still be a non-resident for the period you were working here and you changed your domicile.  (Advanced question: This would not be true though if you moved to PA as we have a reciprocal tax agreement with them so there would be no non-resident return if you moved to a reciprocal state and notified employer to stop withholding NJ taxes).

[cjn623]

I live in PA until August, then moved to NJ. I worked in NJ the whole year, I paid state taxes to PA the whole year. I filed my time worked while living in NJ and they are trying to hit me with NR and R taxes in NJ.

[maglib]

PA & NJ have a reciprocal tax agreement which means you only pay taxes to your home state.  You would have had to notify your employer that you moved so they would start withhold NJ and not PA taxes.  So in your scenario you are a part year resident of PA where you would allocate 8/12 of your income if salaried or based on time worked if hourly to PA for that time period.   You are also a part year resident of NJ for 4/12 of the year.   So you file a part year return in both states (NJ does not have a part year return but you call allocate the income during the interview), YOU DO NOT get a credit for taxes paid to another state due to reciprocity agreement.  

PA PART YEAR RULES:
As a part-year resident, you are subject to PA tax on ALL income earned, received, or credited for that part of the year you were a PA resident. You are also subject to PA tax on all income earned received or credited from PA sources for that part of the year you were a nonresident.

Part-year residents use the same PA-40 that residents and nonresidents use. Make sure when you complete your return that you indicate that you are a part-year resident by filling in the oval for "part-year resident."

If you are a part-year resident, Pennsylvania taxes you on the following kinds of income from PA sources:

Compensation. Pennsylvania taxes part-year residents on compensation for services performed in Pennsylvania, unless you are a resident of one of the reciprocal agreement states (Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia). If you are a resident of a reciprocal agreement state, your Pennsylvania employer should withhold and remit the tax to that state.

Net Income or Loss from the Operation of a Business, Profession, or Farm. Pennsylvania taxes part year resident owners on all income from the operation of a business entity in Pennsylvania.

If you derive income from sources both inside and outside Pennsylvania, you should maintain separate accounts and records that clearly reflect your PA business activity. Otherwise, you must file a PA Schedule NRH to apportion your income.

Net Income or Loss from the Sale, Exchange, or Disposition of Property. Pennsylvania taxes part year residents on the gain from the sale of any real or tangible personal property located in Pennsylvania.

Important: If you sell property in your former state before moving into Pennsylvania, you are not subject to tax on the gain.

However, if you moved from Pennsylvania to another state and then sell property or any other tangible property in Pennsylvania, you must report the gain, unless you qualify for an exclusion from paying tax on the gain of the sale of your principal residence, whether within or outside Pennsylvania.

For more information, view the sale of Your Principal Residence brochures, REV-625.

Net Income or Loss from Rents, Royalties, Patents, and Copyrights. Pennsylvania taxes nonresidents on the net income from the use of property located in Pennsylvania or used in Pennsylvania.

Estate or Trust Income. Pennsylvania taxes part-year resident beneficiaries on income from an estate or trust, only to the extent the PA source income to the beneficiaries is taxable to part-year residents.

Winnings from gambling activities from within Pennsylvania, except those winnings from the PA Lottery, for tax years prior to January 1, 2016.

Pursuant to Act 84 of 2016, winners who receive a cash prize or an annuity payment from the PA Lottery, must report those payments as taxable income on their 2016 PA personal income tax return.  This is retroactive to January 1, 2016.  This also includes payments from annuities or cash prizes won prior to, but not received until 2016 or later.

Make sure you fill in the oval for a "part-year" return and record the time period you were a resident.

For copies of all Pennsylvania Personal Income Tax Forms and Instructions visit the Forms and Publications page of our web site.

[maglib]

NJ RULES:
f you became a resident of New Jersey or you moved out of the state during the tax year, you are considered a part-year New Jersey resident. Part-year residents may be required to file a New Jersey tax return.

Since New Jersey does not have a special form for part-year filers, you must use the regular resident return, Form NJ-1040. The return provides a line for you to show the period of your residency in the state.

As a part-year resident, you report only the income you earned or received while you were a New Jersey resident. You must prorate all the credits, exclusions, exemptions, and deductions for which you qualify. That means you can take only that part of the full deduction, credit, exclusion, or exemption that represents the amount of time you were a resident of the state.

***If you continued to receive income from New Jersey sources after you moved out of the state, or if you received income from New Jersey sources prior to moving to the state, then you also will have to file a New Jersey nonresident tax return, Form NJ-1040NR  1.1 mb. In this case, you will file both a part-year resident return and a part-year nonresident return.*** Note this section is not true in your case as you had a reciprocity agreement with PA an NJ.

[maglib]

Just a question.  Any chance you were a student and you maintained a residence here with parents or such?  Was PA a domiciled, a place you intended to live and had a drivers license, voting records, and was not just temporary?

[cjn623]

So then I should only have to pay the resident taxes for NJ for the months in lived in NJ then? Can I just ignore the non resident taxes or is there someone else i should notify?

[maglib]

You need to notify your employer and should have done a change in residency with them and the IRS.  This way you have all your i's dotted and t's crossed and the correct withholdings would have been made. You should also make sure you change your DL, your voting records and accounts to your new address to prove residency changes.   But as PA reciprical with NJ, you are correct only a resident return should be filed in NJ for the period of time you lived there.  NJ does not have a part year resident return but, you can allocate income.  Make sure to adjust for 196 deductions....  NJ taxes them while the Fed does not, why w-2 income for NJ is normally higher than federal.

[cjn623]

I was a student in NJ and work in NJ, I lived at my parents until I moved in August 2018. I did change my address in the work system, it says so on my pay stubs but still taking out PA withholding

[maglib]

So your were a student in NJ and a resident of PA as that's where you intended to return to after temporary leave for college?  THen you are a resident of PA the whole year. The question is where is your domicile which is not transitory address like away temporarily for college.  Your domicile is where you have a permanent place of abode.