Q. In 2004 I was a part-year resident of Michigan (from January thru November) and a part-year resident of New Jersey (December), but received NO income from New Jersey itself (only Michigan, New York and Virginia). Do I have to file a part-year return for New Jersey? If I do, should I allocate 11/12 of the year's income/expenses to Michigan and 1/12 to New Jersey?
I understand I have to file non-resident state returns in New York and Virginia as well.
A. Yes - as a part-year resident of the great State of New Jersey (lucky you) you must file a NJ-1040 for 2004 to report all of your taxable income for period of residence – even though the period of residence is only one month.
As a resident of New Jersey you are taxed on all “taxable” income regardless of the source – not just income from sources within New Jersey.
You would not just allocate 1/12 of all income for the year. What you would report to New Jersey is the money that was actually received in the month of December – your period of residence.
You would only report wages received in the month of December – or for those days in the month of December that you were a NJ resident. You should be able to determine this amount from your pay stubs. You would not report 1/12 of the wages earned in Michigan if, as I expect, you did not work in Michigan while living in New Jersey. Except if, while a New Jersey resident, you received a final paycheck of severance pay or accumulated unused sick or vacation pay. It is possible that some of this information would be on your individual W-2s.
As for interest and dividends, again you would only report the amount received during your period of NJ residence. You would also report any capital gains from investment sales that took place during this period.
You would be allowed a deduction for “excess” medical expenses that you paid during your period of residence. As for your personal exemptions – in this case you would claim only 1/12 of the $1,000 or $1,500 NJ exemption amounts.
And yes, you would also have to file non-resident Virginia and New York state income tax returns. You would be able to claim a credit for the taxes paid to these states on your resident NJ-1040 or, if applicable, Michigan returns.
Any more questions?
TTFN
I understand I have to file non-resident state returns in New York and Virginia as well.
A. Yes - as a part-year resident of the great State of New Jersey (lucky you) you must file a NJ-1040 for 2004 to report all of your taxable income for period of residence – even though the period of residence is only one month.
As a resident of New Jersey you are taxed on all “taxable” income regardless of the source – not just income from sources within New Jersey.
You would not just allocate 1/12 of all income for the year. What you would report to New Jersey is the money that was actually received in the month of December – your period of residence.
You would only report wages received in the month of December – or for those days in the month of December that you were a NJ resident. You should be able to determine this amount from your pay stubs. You would not report 1/12 of the wages earned in Michigan if, as I expect, you did not work in Michigan while living in New Jersey. Except if, while a New Jersey resident, you received a final paycheck of severance pay or accumulated unused sick or vacation pay. It is possible that some of this information would be on your individual W-2s.
As for interest and dividends, again you would only report the amount received during your period of NJ residence. You would also report any capital gains from investment sales that took place during this period.
You would be allowed a deduction for “excess” medical expenses that you paid during your period of residence. As for your personal exemptions – in this case you would claim only 1/12 of the $1,000 or $1,500 NJ exemption amounts.
And yes, you would also have to file non-resident Virginia and New York state income tax returns. You would be able to claim a credit for the taxes paid to these states on your resident NJ-1040 or, if applicable, Michigan returns.
Any more questions?
TTFN
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