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I am considering spending three months abroad while working remotely. While I plan on returning to my current state (New Jersey), I do not want to continue to pay rent when I'm not here, which means I would not have a NJ address during this time. Would that change my tax residency? I would like to remain resident of the state to avoid tax complications. I would also appreciate any resources you could direct me to.

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  • Where would you get mail? It's possible that you might get time-sensitive things by US Mail (e.g. summons to jury duty, notice of IRS audit), so it might be a good idea to have a friend or family receive your mail. Then that becomes your temporary residence...
    – jamesqf
    Commented Aug 18, 2020 at 16:16

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I'm familiar with being a part-year state resident in a a state that also collected income tax. Looking over New Jersey it appears to be the same. That is they look at your intent for the move as to whether it is temporary or permanent. From your situation, the intent definitely appears to be temporary and you'd be a full-year resident of NJ as a result. If you could document your intention to stay long term in another state or country (driver's license, residency permit, bank accounts, etc.), you could make the case that the move was indeed intended to be permanent, and then would not be subject to NJ state income tax for the period you did not live there.

For New Jersey Income Tax purposes, your residency status depends on where you were domiciled and where you maintained a permanent home during the tax year. Generally, when you change your domicile during the year, you are a resident of New Jersey for part of the year (part-year resident) and a nonresident of New Jersey for part of the year (part-year nonresident). Your move is generally considered a change of residency status (resident to nonresident or vice versa) if, at the time you moved, you intended to permanently leave one home and establish a new permanent home somewhere else.

In regards to US income tax, you'd still have to file that the same as you previously did as the length of stay outside the US wouldn't allow for you to be eligible the Foreign Earned Income Exclusion.

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  • The last paragraph could be improved by mentioning, even in passing, the ability to potentially claim foreign tax credits against foreign employment income; the current implication of that last paragraph is that the OP may pay double tax, which is quite unlikely (it would depend on the tax treaty between the US and the foreign country). Commented Aug 18, 2020 at 22:41
  • Agreed, however eligibility for the FEIE is quite complicated and outside of the scope of the OP question. I just wanted to make it a point that federal taxes wouldn't change in this instance and provide the relevant information from the IRS if they were interested in learning more.
    – Travis
    Commented Aug 19, 2020 at 2:34
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Interestingly, say you sold your home and moved overseas FOREVER !

Your tax residence location would still be NJ.

Here's a clear explanation re US'ers who live overseas for a long time:

https://vhd.overseasvotefoundation.org/index.php?/ovf/Knowledgebase/Article/View/1030/1/which-state-do-i-vote-in-if-i-no-longer-maintain-us-residence

If you holiday overseas for three months,

and indeed "get rid of" your rental or owned home in NJ when you leave,

there are absolutely no US tax implications, whatsoever. You do not even "tell them" about it; it is fortunately completely irrelevant.

The one and only change would be, on your next tax return, you'd have "changed address" - that's it. Nothing else.

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