NJ State Question

[rwm221]

I have a client that lived in NJ January and February of 2020. On January 6 th of 1010 they closed out their 401k for 165,000 and had NJ taxes taken out. They moved to Arizona in March and in July their house in NJ sold. NJ took $5000 from their sale of home. Since they were AZ residents at the time are they entitled to get the sale of home money back? If not where on the NJ form does the additional tax from sale of home go .

[MAJ]

The N.J. tax guide, “Buying or Selling a Home in New Jersey,” says New Jersey residents who sell their homes and move out of New Jersey are considered non-residents for the purpose of the sale. This is why the estimated tax (exit tax) is withheld.

But you can get the money back when you file your non-resident New Jersey tax form. If you don’t want to wait, you can file a Form A-3128 to claim an early refund after the closing, along with proof of overpayment.

From the PDF:
Nonresidents must complete Part I of the NJ-1040-NR and report any gain from the sale of New Jersey property as Net Gains or Income From Disposition of Property (if loss, enter 0). Report any estimated tax payment paid at closing on the Estimated Payment/Credit line. Do not report the estimated payment as New Jersey Income Tax Withholdings.

Hope this helps..

[rwm221]

Another question: Since they were resident of NJ for January and February I use the NJ 1040 and put in the 2 months they were NJ Residents. Can I also add a nonresident for the sale of the house?