how to end residency with a state

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ketanco
Posts: 102
Joined: Wed Jul 24, 2013 7:09 pm

how to end residency with a state

Post by ketanco » Tue Mar 20, 2018 9:40 am

when I was in the US my last place of residency was NJ. since over a year I am living in a foreign country. My last income tax filling to NJ was a resident form for 2016.
Now my 2017 overall income is less than 10K. I had a single owner LLC in NJ in 2017, which I closed in end of 2017. As of now I have nothing left in NJ except a mailbox for convenience, which I can also close if needed.
Below 10K income, NJ says that I dont need to file a return. But if I dont, how do I tell them that I am not resident anymore? Plus I had the LLC there in 2017. I formally closed it end of 2017 with NJ.
I dont want them coming after me 5years from now, and saying where are all the tax returns, you never formally separated with us etc etc... and i will have to deal with years of paperwork internationally... so should I still file to them now? or may be i should send adress change form but will it be like saying i am not resident with you anymore? or i simply do nothing and for me NJ is automatically over?
Note: I am going to continue filing federal taxes.. I only ask about NJ here.

oldfatguy
Posts: 80
Joined: Tue Feb 27, 2018 1:38 pm

Re: how to end residency with a state

Post by oldfatguy » Tue Mar 20, 2018 9:49 am

ketanco wrote:
Tue Mar 20, 2018 9:40 am
when I was in the US my last place of residency was NJ. since over a year I am living in a foreign country. My last income tax filling to NJ was a resident form for 2016.
Now my 2017 overall income is less than 10K. I had a single owner LLC in NJ in 2017, which I closed in end of 2017. As of now I have nothing left in NJ except a mailbox for convenience, which I can also close if needed.
Below 10K income, NJ says that I dont need to file a return. But if I dont, how do I tell them that I am not resident anymore? Plus I had the LLC there in 2017. I formally closed it end of 2017 with NJ.
I dont want them coming after me 5years from now, and saying where are all the tax returns, you never formally separated with us etc etc... and i will have to deal with years of paperwork internationally... so should I still file to them now? or may be i should send adress change form but will it be like saying i am not resident with you anymore? or i simply do nothing and for me NJ is automatically over?
Note: I am going to continue filing federal taxes.. I only ask about NJ here.
The definitions of resident, nonresident, and part year resident are found here:
http://www.state.nj.us/treasury/taxatio ... 040nri.pdf


Which Form to File
Nonresident — Form NJ-1040NR
♦ New Jersey was not your domicile, and you spent 183 days or less here; or
♦ New Jersey was not your domicile, you spent more than 183 days here, but you
did not maintain a permanent* home here.
Also you may be considered a nonresident for New Jersey tax purposes if you
were domiciled in New Jersey and you met all three of the following conditions
for the entire year:
1. You did not maintain a permanent home in New Jersey; and
2. You did maintain a permanent home outside New Jersey; and
3. You did not spend more than 30 days in New Jersey.

Part-Year Resident — Form NJ-1040
ΠNew Jersey was your domicile (permanent legal residence) for part of the year;
or
ΠNew Jersey was not your domicile, but you maintained a permanent* home here
for part of the year and spent more than 183 days here. Members of the Armed
Forces and their spouses, see page 7.
Note: You may have to file both a part-year resident and a part-year nonresident
return if you received income from New Jersey sources while you were a
nonresident (see page 5).

Full-Year Resident — Form NJ-1040
♦ New Jersey was your domicile (permanent legal residence) for the entire year; or
♦ New Jersey was not your domicile, but you maintained a permanent* home
here for the entire year and spent more than 183 days here. Members of the
Armed Forces and their spouses, see page 7.

*A home (whether inside or outside New Jersey) is not permanent if it is maintained
only during a temporary period to accomplish a particular purpose. A home used
only for vacations is not a permanent home.

AlohaJoe
Posts: 3670
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: how to end residency with a state

Post by AlohaJoe » Tue Mar 20, 2018 9:57 am

This is just one personal anecdote about me and a single state, so it is far from conclusive.

Several years ago I moved away from Colorado to a foreign country. Two or three years later the State of Colorado somehow (probably via the foreign address on my federal tax returns) tracked me down in the foreign country and sent me a letter that basically said, "You stopped paying Colorado state taxes but we can't find any record of you paying taxes in another state, so please give us $XX,000 in back taxes."

All I did was write them a letter saying I had moved to a foreign country. I included my foreign tax returns. (You are going to be filing those, right?) The matter was resolved.

I find it extremely unlikely that you would be engaged in a years long paperwork saga. The people who get into trouble are people who renew their state driver's license, rent out their house, etc, and in general -- even to a neutral third party -- looks a lot like they still consider that place their "home" and intend on returning there one day. And even then I've never heard of any cases that were about someone actually moving internationally rather than simply travelling for an extended period.

rkhusky
Posts: 5395
Joined: Thu Aug 18, 2011 8:09 pm

Re: how to end residency with a state

Post by rkhusky » Tue Mar 20, 2018 10:08 am

There is no formal process. You just move. But that usually entails having bills, subscriptions, voting registration, driver's license, bank accounts, etc moved to the new location. Colleges have lists of things they expect to see if you want to get in-state tuition.

ketanco
Posts: 102
Joined: Wed Jul 24, 2013 7:09 pm

Re: how to end residency with a state

Post by ketanco » Tue Mar 20, 2018 12:06 pm

AlohaJoe wrote:
Tue Mar 20, 2018 9:57 am
This is just one personal anecdote about me and a single state, so it is far from conclusive.

Several years ago I moved away from Colorado to a foreign country. Two or three years later the State of Colorado somehow (probably via the foreign address on my federal tax returns) tracked me down in the foreign country and sent me a letter that basically said, "You stopped paying Colorado state taxes but we can't find any record of you paying taxes in another state, so please give us $XX,000 in back taxes."

All I did was write them a letter saying I had moved to a foreign country. I included my foreign tax returns. (You are going to be filing those, right?) The matter was resolved.

I find it extremely unlikely that you would be engaged in a years long paperwork saga. The people who get into trouble are people who renew their state driver's license, rent out their house, etc, and in general -- even to a neutral third party -- looks a lot like they still consider that place their "home" and intend on returning there one day. And even then I've never heard of any cases that were about someone actually moving internationally rather than simply travelling for an extended period.
Thanks for the answer but why did you have to show them foreign taxes? You were not a resident of them anymore. Wasn't it enough to prove them that you indeed lived in a foreign country, with all your life setup there? Not that i will not be paying taxes in the foreign country, but i find it so disturbing to think that a state is always on your back even after you move out of there with nothing left.... do you understand what i mean?

Or may be you never filed a NR return the last time you filed to Colorado and that is why the door was never closed?

Also, what happens after you show them you paid foreign taxes... the following years you have to show them foreign taxes again ? But how can they keep asking it if you live in a foreign country and dont have anything in colorado anymore and not a resident of them

I only have a mailbox now in nj and that is all. I am ot considering going back there, abd my drivers license there is expired

Beehave
Posts: 327
Joined: Mon Jun 19, 2017 12:46 pm

Re: how to end residency with a state

Post by Beehave » Tue Mar 20, 2018 12:18 pm

Probably a really good idea to get rid of your New Jersey driver's license, voting registration, and car registration. Perhaps this link will help with the LLC http://www.state.nj.us/treasury/revenue/dissolve.shtml .

Best wishes.

HAF-VA
Posts: 11
Joined: Wed Mar 14, 2018 7:57 am

Re: how to end residency with a state

Post by HAF-VA » Tue Mar 20, 2018 12:28 pm

Some states take the position that if you are a resident and you go overseas you remain a taxpaying resident since you haven't established residency in another US state. You have to take active steps to prove to the authorities that you do not intent do return to that state. Proving the negative is hard, but you need to cancel voting registrations, cancel drivers licenses (or get a foreign one and give up the state license), close local bank accounts (i.e., why do you need a bank or credit union account that is only located in the community). I used E*Trade at the time I went overseas and they didn't have branches in the state I was leaving so I kept them and closed the local bank account. Turn in library card (mail it back saying you've left the state and have no plans to return and keep a copy of that letter). Resign membership in any church. Write a letter telling them to please remove you from the membership. Thank them and give them a small donation on the way out the door telling them you don't intend to return to the state. Don't try keeping your house and renting it - it looks like intent to return later. Brainstorm and think of all the ways you can cut ties with the state. Have all these forms of paperwork (letters resigning, etc) so you have lots of evidence that you don't intend to return. Then please don't go back to that state when you return. Establish residency in a different state when you come back or all this may be for nought.

I did all this when I moved overseas because I knew I'd have stock options that would vest while overseas and I didn't want the state to get its grubby hands on them. I also had only tenuous ties to that state. I had only moved there 3 years earlier. Had no family in that state and did all the things I listed above.

ketanco
Posts: 102
Joined: Wed Jul 24, 2013 7:09 pm

Re: how to end residency with a state

Post by ketanco » Tue Mar 20, 2018 12:40 pm

HAF-VA wrote:
Tue Mar 20, 2018 12:28 pm
Some states take the position that if you are a resident and you go overseas you remain a taxpaying resident since you haven't established residency in another US state. You have to take active steps to prove to the authorities that you do not intent do return to that state. Proving the negative is hard, but you need to cancel voting registrations, cancel drivers licenses (or get a foreign one and give up the state license), close local bank accounts (i.e., why do you need a bank or credit union account that is only located in the community). I used E*Trade at the time I went overseas and they didn't have branches in the state I was leaving so I kept them and closed the local bank account. Turn in library card (mail it back saying you've left the state and have no plans to return and keep a copy of that letter). Resign membership in any church. Write a letter telling them to please remove you from the membership. Thank them and give them a small donation on the way out the door telling them you don't intend to return to the state. Don't try keeping your house and renting it - it looks like intent to return later. Brainstorm and think of all the ways you can cut ties with the state. Have all these forms of paperwork (letters resigning, etc) so you have lots of evidence that you don't intend to return. Then please don't go back to that state when you return. Establish residency in a different state when you come back or all this may be for nought.

I did all this when I moved overseas because I knew I'd have stock options that would vest while overseas and I didn't want the state to get its grubby hands on them. I also had only tenuous ties to that state. I had only moved there 3 years earlier. Had no family in that state and did all the things I listed above.
That's really no problem, my NJ driver's license expired long time ago. I have foreign driver's license. I pay rent in foreign country. I even take some masters classes outside. I didn't obtain foreign employment yet but all i have left in NJ now is a mailbox address for convenience. So back to my question, do i file a NR return to NJ this year, or not necessary and i am automatically not a resident anymore ? Because my overall income is below 10K, it seems it is optional for me to file or not

rkhusky
Posts: 5395
Joined: Thu Aug 18, 2011 8:09 pm

Re: how to end residency with a state

Post by rkhusky » Tue Mar 20, 2018 1:30 pm

You only file a NR return if you were a non-resident for the full year and you received income while working in the state. If your income in the state was below the threshold for filing a return, then you don't even need to do that.

You file the part-time return if you were a resident for only part of the year and you received income above the threshold for filing.

There may be different rules for business income and business filing.

ncbill
Posts: 342
Joined: Sun Jul 06, 2008 4:03 pm

Re: how to end residency with a state

Post by ncbill » Tue Mar 20, 2018 1:57 pm

ketanco wrote:
Tue Mar 20, 2018 12:06 pm
AlohaJoe wrote:
Tue Mar 20, 2018 9:57 am
This is just one personal anecdote about me and a single state, so it is far from conclusive.

Several years ago I moved away from Colorado to a foreign country. Two or three years later the State of Colorado somehow (probably via the foreign address on my federal tax returns) tracked me down in the foreign country and sent me a letter that basically said, "You stopped paying Colorado state taxes but we can't find any record of you paying taxes in another state, so please give us $XX,000 in back taxes."

All I did was write them a letter saying I had moved to a foreign country. I included my foreign tax returns. (You are going to be filing those, right?) The matter was resolved.

I find it extremely unlikely that you would be engaged in a years-long paperwork saga. The people who get into trouble are people who renew their state driver's license, rent out their house, etc, and in general -- even to a neutral third party -- looks a lot like they still consider that place their "home" and intend on returning there one day. And even then I've never heard of any cases that were about someone actually moving internationally rather than simply traveling for an extended period.
Thanks for the answer but why did you have to show them foreign taxes? You were not a resident of them anymore. Wasn't it enough to prove them that you indeed lived in a foreign country, with all your life setup there? Not that i will not be paying taxes in the foreign country, but i find it so disturbing to think that a state is always on your back even after you move out of there with nothing left.... do you understand what i mean?

Or maybe you never filed a NR return the last time you filed to Colorado and that is why the door was never closed?

Also, what happens after you show them you paid foreign taxes... the following years you have to show them foreign taxes again? But how can they keep asking it if you live in a foreign country and don't have anything in Colorado anymore and not a resident of them

I only have a mailbox now in nj and that is all. I am not considering going back there, and my driver's license there is expired
I handled paying taxes for an older relative who left for Mexico and died there several years later.

I just called when I got the "why haven't you paid us taxes?" letter from the state and explained they left the country in 20XX.

Of course, since they died with no assets to levy it didn't much matter what the state wanted. :)

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sperry8
Posts: 1573
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: how to end residency with a state

Post by sperry8 » Tue Mar 20, 2018 2:46 pm

Beehave wrote:
Tue Mar 20, 2018 12:18 pm
Probably a really good idea to get rid of your New Jersey driver's license, voting registration, and car registration. Perhaps this link will help with the LLC http://www.state.nj.us/treasury/revenue/dissolve.shtml .

Best wishes.
Good idea about the voter registration. I moved out of CA last year and did everything on this thread except that. Didn't realize it should be done. I will do it now. Thanks!
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

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