Have you noticed more moving trucks on your block recently?
Well, here’s why.
The recent National Movers Study released by United Van Lines pointed to New Jersey leading the way among all states and the District of Columbia for outmigration, with 67 percent outbound.
And according to several different studies and organizations, a major reason for this significant exodus is that many retirees cannot afford to live in New Jersey. The state also ranks among the worst states for retirees when it comes to tax policies.
For more than a decade, New Jersey has had the highest death taxes in the nation. The Garden State is one of only two states (along with Maryland) that has both an estate tax and an inheritance tax and, unlike most states, New Jersey never hiked its $675,000 exclusion to match the federal exclusion of $5.1 million, according to the New Jersey Society of Certified Public Accountants (NJCPA). A recent survey by the NJCPA found that 74 percent of NJCPA respondents actually have advised clients to relocate to another state because of New Jersey’s estate and inheritance taxes. A strong majority (85 percent) think these taxes impact the state’s middle class just as much as the affluent.
The relatively low retirement-income tax exemptions is another key factor in New Jersey’s poor ranking.
New Jersey currently allows residents age 62 older who make under $100,000 annually to exempt up to $15,000 of their retirement income from state income taxes. The exemption is capped at $20,000 for couples in New Jersey. The cap is $40,000 in New York, while Pennsylvania does not tax retirement income at all.
“The tax policies in our neighboring states offer a real temptation for seniors to leave New Jersey,” said NJCPA CEO Ralph Albert Thomas. “Keeping New Jersey retirees in New Jersey by providing tax-fairness measures is critical to helping improve the state’s economy and business climate.”