Coming back to US: state residency for 2018 (OH, NJ, both?)

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northernisland
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Coming back to US: state residency for 2018 (OH, NJ, both?)

Post by northernisland » Mon Jun 18, 2018 11:21 pm

I'm a longtime reader here. We live abroad. We've usually filed residency through Ohio, where my inlaws live and which has been our base when we're back. We'll be moving to NJ in September and have a lease in hand for a year for that. During the summer (July 6-end of August) there will be a mix of vacation, travel for work, training in another midwestern state (10 days). During the summer I don't think I'll spend more than 30 days in any state.

Here's my question. My US-based employer wants me to fill out an NJ-W4 form for when we return. Here are my questions: (1) should I just be listing Ohio for the two months when we are back, since that has been the state where we were. In this case would I think fill out the NJ-W4 for September? (2) Alternately, should NJ be our default state when we return, since we'll be traveling during the summer, all in temporary residences? How does this impact my employer?

To complicate matters, my spouse will likely renew the OH license in July, since it expires and Ohio DMV can renew it within 6 months (could not get the sight test here to renew from abroad). We'll also (3) be buying a car at some point, which I think means we'll have to get new insurance when we return and then register it in Ohio, although we may be able to kick the can until we're in NJ and borrow from family members.

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Lancelot
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Re: Coming back to US: state residency for 2018 (OH, NJ, both?)

Post by Lancelot » Tue Jun 19, 2018 1:35 am

I've lived abroad since 2002; I had lived in the Midwest but used me parents address to file my federal return. Big mistake because NC state tax department sent me a bill. I spoke with a revenue agent and explained that had never resided in NC and was only visiting family. He asked where I would reside when I returned to the usa and I replied Texas. That ended the matter; intent being the deciding factor.

To the OP, were you paying state tax to Ohio while you were abroad?
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northernisland
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Re: Coming back to US: state residency for 2018 (OH, NJ, both?)

Post by northernisland » Tue Jun 19, 2018 2:46 am

We've been paying in Ohio. In practice, it is often for a fraction of a year (come back in for sixty days, and this is calculated as partial-year resident). I *think* I've been doing it right, although I've sometimes got an adjusted bill from Ohio and had to talk to them or pay a very small penalty.

I think probably both ways would actually work. For instance, if I list NJ for six months and show the form to OH, they would probably accept it. I'm just try to figure out if it's preferable/possible to pay two months to Ohio and four to NJ. I'm not trying to dodge anything--they tax rates will be nearly identical for us. I think going forward we will be NJ residents again, at least until the next time we return to the US.

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northernisland
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Re: Coming back to US: state residency for 2018 (OH, NJ, both?)

Post by northernisland » Tue Jun 19, 2018 8:30 pm

Bumping this. My basic question is really just about multi-state residency. Do I need to fill out multiple W4s, or do I just deal with it next April?

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grabiner
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Re: Coming back to US: state residency for 2018 (OH, NJ, both?)

Post by grabiner » Sat Jun 23, 2018 4:34 pm

northernisland wrote:
Tue Jun 19, 2018 8:30 pm
Bumping this. My basic question is really just about multi-state residency. Do I need to fill out multiple W4s, or do I just deal with it next April?
You should fill out multiple W-4s as you change residency. The state probably requires that all residents of the state have tax withheld by that state, although you might avoid a penalty if the withholding is wrong. The multiple W-4s will also make it less likely that the states will question your income; if your W-2 reports $X in OH wages and $Y in NJ wages, NJ will not try to collect the tax on $X+Y. The new W-4 should be filed for the paycheck in which you change, so that the income is reported to the correct state.

There is also a practical issue. If you have everything withheld in one state, you will owe a big tax bill to the other state, and have a big refund in the first state. The refund may well get delayed.
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clemrick
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Re: Coming back to US: state residency for 2018 (OH, NJ, both?)

Post by clemrick » Sat Jun 23, 2018 11:22 pm

You need to determine which state is your "nexus" or home state for which months. Traveling and temporary training or work assignments do not affect that. You will have to choose a home state.

Also, be aware that states have laws as to when you need to have your driver's license and car license changed to your new state. I have heard that New Jersey is very strict about income taxes and may also be strict about licensing, anything that makes them money.

Ask your employer if it will withhold for Ohio. It may not because it would open it up to Ohio employment laws. So you will have to continue paying Ohio however you have been paying them.

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