A message from
State Delegate Jim Toma about
the New Jersey “Exit Tax”
Between the past several
monthly Local 600 meetings,
executive board meetings and
phone calls received at the
Local 600 office, I and other
members have been fielding
questions about an issue that
JIM
is facing many of our retired
TOMA
members: What are our
responsibilities if and when
we decide to move out of New Jersey regarding
the so called “exit tax” imposed by the State?
I have heard so much about this with so
many of my friends and Local 600 members
exploring the idea of moving to warmer pastures or to more pension tax-friendly states
that I thought we needed to understand
exactly how and why someone could be penalized for leaving one state for another.
So I contacted a couple of experienced real
estate and tax attorneys for an explanation. As
it turns out, the “exit tax” is not really a freestanding tax, but rather an estimated tax on
any potential gain/profit on the sale of your
house. Basically, it’s an upfront payment on
your home sale whether you have a gain or not
to force potential future non-residents to file
New Jersey taxes after they leave the state. And
by filing your return, you would be refunded
the tax you paid at closing if in fact you were
not required to do so.
Past New Jersey Governor Jim McGreevey
created this scheme in 2004 to force people
fleeing the state to pay a 2-percent minimum
estimated tax on their sale with the idea that
this would ensure ex-pats from New Jersey
would file their State tax the following April.
Ultimately if you lost money on your sale or
if there was no capital gain you would get your
money back. Of course, you need to know the
many exclusions for capital gains on your
home for the reimbursement. For instance if
you are married and the home was your principal residence for the last two of five years, up
to $500,000 of gain is excluded; it is $250,000 for
single tax filers.
Your accountants and lawyers at the time
of your sale and move will explain all this in
legalese better than I can. But I wanted to
make everybody aware that in fact this “exit
tax” is not a penalty for moving out of New
Jersey, but rather it could more accurately be
referred to as “hostage taking” of your
money until the “ransom” of your New Jersey
State tax form is filed. d
Local 600 meeting updates
Our June 14 meeting will feature a presentation from retired Lieutenant Joe Genova of
the New Jersey State Police who ran the RPO
firearms unit; he will be clarifying the rules
and regulations in New Jersey concerning
retired officers’ right to carry and the
requirements that go with that right. Also,
Assemblyman John Wisniewski (D-19th district) will be speaking about legislation
directly affecting our members both active
and retired. This meeting is at St. James
Church Hall in Woodbridge at noon. There
will also be an election that day for two
trustee positions.
18
NEW JERSEY COPS
■
MAY 2016
June 14:
July:
Aug. 9:
Sept. 13:
Oct. 11:
Oct. 25:
Nov. 8:
Dec. 13:
St. James Church (Elections)
No meeting
Lacey Elks (BBQ Picnic)
St. James Church
Lacey Elks
Bergen County, location TBA
St. James Church
St. James Church
St. James Church
341 Amboy Ave.
Woodbridge
Lacey Elks
900 Beach Blvd
Forked River