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March 13, 2021
Question

Property Taxes paid while non-resident

  • March 13, 2021
  • 1 reply
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We moved from NJ to NV in 2020.  Our NJ house is still not sold, and so we've been paying property taxes in NJ even after we moved to NV.  Can I claim the deduction for all property tax paid in 2020 for the NJ house in my NJ state part-year-resident return?

1 reply

March 15, 2021

No, for NJ state tax purposes you can only deduct the property taxes paid during your NJ residency.

 

From NJ Income Tax – Part-Year Residents: As a part-year resident, you report only the income you earned or received while you were a New Jersey resident. You must prorate all the credits, exclusions, exemptions, and deductions for which you qualify. That means you can take only that part of the full deduction, credit, exclusion, or exemption that represents the amount of time you were a resident of the state.

 

NJ's premise is that you paid the remaining balance of property taxes with income that was earned elsewhere and not taxed in NJ. As a general rule, you can only deduct items that were paid for with after-tax earnings - since NJ can't tax the earnings used to pay your NJ property taxes, they won't let you deduct that portion of the property taxes.