New Jersey Tax Residency Rules

New Jersey State Tax Residency Summary

New Jersey uses two main tests to determine your residency for tax purposes: Domicile and Statutory Residency. Understanding these rules is critical because residents are taxed on their worldwide income, while nonresidents are only taxed on income derived from New Jersey sources.

1. Domicile Test

Domicile is the place and state you consider your permanent home — the place where you intend to return after a period of absence (e.g., vacation, business assignment, educational leave). You have only one domicile, although you may have more than one place to live. Your domicile continues until you establish a new permanent home elsewhere.

If New Jersey is your domicile, you are considered a resident for New Jersey tax purposes, unless you meet all three of the following conditions:

• You did not maintain a permanent home in New Jersey; AND
• You maintained a permanent home outside New Jersey; AND
• You did not spend more than 30 days in New Jersey during the tax year.

2. Statutory Residency (183-Day Rule)

Even if New Jersey is not your domicile, you are considered a resident for tax purposes if:

• You maintain a permanent home in New Jersey; AND
• You spend more than 183 days in New Jersey during the tax year.

Permanent Home Definition

"Permanent Home" means a residence that you maintain permanently as your principal residence (main home), whether or not you own it. Your home is not considered permanent if you maintain it only during a temporary period of time to accomplish a specific purpose (e.g., temporary job assignment).

Factors Considered in Domicile Determinations

The Division of Taxation considers many factors when determining if New Jersey is your domicile, including:

• Your intent;
• Where you register to vote;
• Your driver’s license and vehicle registration;
• Where you have family ties;
• Whether your federal tax return lists New Jersey as a home address;
• Location of bank accounts;
• Whether you participated in a New Jersey property tax relief program.

Part-Year Residents

If you change your domicile and meet the definition of a resident or nonresident for only part of the year, you are a resident for part of the year (part-year resident) and a nonresident for the remainder of that year. You may need to file both a part-year resident return (Form NJ-1040) and a part-year nonresident return (Form NJ-1040NR) if you received income from New Jersey sources during both periods.

Burden of Proof and Record Keeping

Just like in other states, the burden of proof is often on the taxpayer to demonstrate their residency status. If you are claiming a change of domicile or that you did not spend more than 183 days in New Jersey, detailed records are essential.

Conclusion

Understanding New Jersey residency rules is crucial for managing day counts, tax planning and compliance. The burden of proof is on you to show where you were.

---