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Non-Resident Estimated Gross Income Tax Information

Information is believed to be accurate but not guaranteed.
Official realty transfer taxes and income taxes, exemptions, etc. are determined by the county recording officer at the time of deed recording. For additional information contact the NJ Division of Taxation at 609-292-6400. With frequent changes to the laws, Probe Lawyers Service is not responsible for inaccurace or outdated information contained in this website.

Recently enacted P.L. 2004 c.55 (A-3128) requires nonresident individuals, estates and trusts that sell New Jersey real property to make an estimated New Jersey gross income tax payment on the gain from such sale. The estimated tax payment is to be submitted to the County Clerk (as agent for the Director of the Division of Taxation) along with an Estimated Tax Form and the deed. If the estimated tax payment and tax form are not submitted to the County Clerk, the County Clerk is obligated to reject the deed. The amount of the estimated tax payment is to be calculated using an Estimated Tax Form prescribed by the Director of Taxation. A nonresident transferor is exempt from the payment of estimated income tax on the transfer if:
  1. The real property in question is used exclusively as the principal residence of the seller within the meaning of section 121 of the federal Internal Revenue Code of 1986, 26 U.S.C. s. 121. (owned the home for at least 2 years and lived in the home as your main home for at least 2 years); or,
  2. The seller is a mortgagor conveying the mortgaged property to a mortgagee by deed in lieu of foreclosure for no additional consideration; or,
  3. The grantee is an agency or authority of the United States of America, an agency or authority of the State of New Jersey, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association or a private mortgage insurance company.
For those transfers by nonresident individuals, estates or trusts where it is claimed that no gain has been realized on the sale, the Estimated Tax Form must still be submitted to the County Clerk along with the deed. Since it is now important for recording purposes to know if the grantor is a nonresident as defined by P.L. 2004 c.55, the standard Affidavit of Title should include the following statement, “For New Jersey Income Tax purposes, I am a resident of the State of ___________”. If the seller’s (individual, estate or trust) residence is other than New Jersey then the Estimated Tax Form and estimated tax payment, if applicable, must accompany the deed submitted for recording.Real property which is the seller's principal residence is exempt from this requirement as are deeds in lieu of foreclosure. Additionally, deeds wherein the grantor or grantee is a government entity, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Government National Mortgage Association or a private mortgage insurance company are exempt.This law takes effect August 1, 2004. Unless the Division of Taxation provides a letter directive, we assume this means that the County Clerks will be seeking compliance with this law on all deeds received on or after August 1, 2004. Of course, compliance with this law contemplates that the Division of Taxation will have made the Estimated Tax Form available for use prior to August 1, 2004.