NJ inherited IRA distribution in 2022 - Question

[Mitzy20]

Hi,

I lived in NJ for 8 months  - to 8/31/22 when we sold our home and  moved to Florida.

I became a Florida resident for remaining part of 2022.

I received a distribution at the end of the year from an inherited IRA (from my mother who passed away in another state in 2011).

Do I owe NJ any portion of this distribution, which I took at the end of 2022?

If so - how do I figure it?

I am  paying federal tax on the full RMD

TY

[MaryK4]

No, if you were a Florida resident when you received the distribution, you do not have to pay New Jersey tax.  

[Mitzy20]

TY for your quick answer.

I had a CPA do my taxes for a few years back and I see that he included the full distribution amt on the NJ return for for those years. For other income i received while in NJ - I am taking 67% of the amount & applying it to the NJ return regardless of when it was received. (I usually take the ira distribution at end of the year in one lump sum.)

So, would the 67% not also apply in this situation? (trying to understand why it wouldnt).

.

[MaryK4]

There is a federal law that says that you only pay retirement income tax (if required) to your resident state.  (It was created for simplicity).  New Jersey says "If you are a nonresident, your pension, annuity, and IRA income is not subject to New Jersey Income Tax."

Your CPA used the 67% because you most likely made contributions that were basis so only part of the income was taxable.  

[Mitzy20]

thank you. But I lived in NJ for 8 months in 2022.

[AmyC]

If you had received a payment each month, then 8 months of the amount would be taxable to NJ.

You received the distribution while living in FL. If FL had a state return, all of it would go on the FL return since all of it was received while a resident.

Since FL does not collect individual taxes, there is no state tax. It should not be reported on the NJ form any longer.