Do I need to file a NJ non-resident return if live in Maine but work for a company in NJ on the side?

[skippypsk]

I live and work in Maine.  I have a side job with a company in NJ and receive a W-2 with 'NJ' and wage amount in boxes 15 and 16.  I have no NJ state tax withheld.  I do not physically travel to NJ to do any work.  Do I need to file a NJ non-resident return? 

In recent years, I've played it safe and filed a non-resident return and took the credit on Maine return.  Do I stick with the conservative approach or just scrap the NJ NR return altogether?

Thank you. 

[IsabellaG]

If you work for your NJ Employer as a remote employee (work from home as a telecommuter) then New Jersey will tax you as a nonresident. It's one of the few states that do. If you worked at some other location in Maine for this company, then you shouldn't have NJ taxes withheld from your pay at all, and you should straighten that out with your employer. As it stands, your W-2 for 2018 is showing NJ income and a NJ return is required based on that income. You can file a NJ return showing zero income from NJ to get all of your withholding back. You'll see this screen:

[skippypsk]

Thanks Isabella. The company only has a NJ location that has afforded me the opportunity to do my monthly work in Maine (it s a side job for me). I have no problem filing a NJ non-resident return as I've been doing that for the past couple yrs since I moved from NJ to Maine. I think it would be a good idea to have the company withhold NJ taxes so I don't have to pay such a large chunk (and minor penalty for underpayment). Have any thoughts on that approach?

Thanks again for the quick response.

[skippypsk]

I've read your response a few times and I think I misinterpreted it last night. Essentially, what you're saying is I'm able to file a NJ NR return and state that no income was earned physically in NJ. So I would owe nothing and not get anything back since I don't have my employer withhold NJ taxes in the first place. When you have the opportunity, please let me know if we're on the same page. Apologies for any confusion.

Thank you.

[IsabellaG]

I'm saying this year, you can file a New Jersey Nonresident return and report zero income from NJ, and get your withholding back for 2018. For 2019, tell your employer to stop withholding for NJ. Then you don't have to file a NJ return at all, because you'll have no withholding, and no income reported to NJ, and you'll be done with NJ tax for good. Does that make sense?

[skippypsk]

Yes that makes complete sense. Although in my initial question, I stated my NJ employer has not withheld NJ taxes; in fact they haven't since I moved to Maine but NJ wages are listed in box 16. So in 2017, I filed a NJ non-resident return and paid what the program said I owed (around 900) and took the credit for taxes paid in other jurisdictions on my Maine return. So based on your previous response, I don't have to file a NJ return at all this year and won't have to again since they are not withholding any NJ taxes. Correct?

Thank you.

[IsabellaG · Accepted solution]

I'm sorry, I didn't notice that there was no withholding for NJ. I guess when I read that you "took the credit on the Maine return" I thought the tax paid to NJ came from your W-2 withholding.

I'd say don't file a NJ return, but then you'd have to be prepared to respond to the state if they contact you looking for one, because it says NJ wages on your W-2. I say that you should file a return, and  indicate that none of the income was earned in NJ, and you wouldn't owe any tax. 

But get your employer to stop putting NJ Wages on your W-2. 

[skippypsk]

We are on the same page. Thank you very much for taking time to deal with my multiple replies, especially this time of year.

[IsabellaG]

Glad I could help! Thank you!