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Living in NY and work in NJ filed wrong

Hi all,

I am NY resident and working in NJ. 

 

I filed non-resident for NJ and resident in NY.  I paid 4k to NY and requested for 7k refund from NJ but it was audited.  I thought I should pay NY only as I am the resident and pay NJ nothing. Done everything on turbotax and filed successfully.

 

I recently realized that I may have done it wrong. should I pay NJ tax and then receive NY refund? 

 

Is there anything I can do to help my situation?

 

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4 Replies
TomD8
Level 15

Living in NY and work in NJ filed wrong

Here's how it works:

Your home state of NY can tax all your income, regardless of where you earn it.

NJ can tax any income you earn from work actually (physically) performed in NJ.

Therefore you should have filed a non-resident NJ return and your home state NY return.

On your NY return, you'll be able to claim a credit for the taxes paid to NJ, so in effect you won't be double-taxed.

Important:  In TurboTax, you must complete the non-resident NJ return first, before you do the home state NY return, so that the program can calculate and apply the credit correctly.  I suspect this is where you made your mistake.

If done correctly, the majority of your state tax bill will be due to NJ.

 

You may have to file amended returns to correct the situation.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Living in NY and work in NJ filed wrong

Thanks. I have follow-up questions if you don't mind answering.

 

1. I reviewed the amend tax section and it requires me to amend federal tax first but I don't need to amend federal tax.  I can just make no change and proceed to state tax?

 

2. I work remotely(physically) entirely in NY in 2021 even my company is in NJ.  When the NJ NR tax form asked "Did you earn all of your wages in New Jersey", should I enter 0 or all in NJ?

I think I don't need to pay any NJ tax and my original filing might be correct.

 

 

 

 

Living in NY and work in NJ filed wrong

This can get complicated, as both NY and NJ use "convenience of the employer" guidelines.  These were generally suspended during COVID, and then reinstated at some point in 2021.  As a result, you may have to do  "before" and "after" calculations.  See:

State of NJ - Department of the Treasury - Division of Taxation - COVID-19 Information - Telecommuti...

TomD8
Level 15

Living in NY and work in NJ filed wrong

Since you actually worked only in NY, per the NJ reference cited by @SweetieJean , your 2021 income earned prior to October 1st would be taxable by both NJ (the "employer's jurisdiction") and NY, and your income from October 1st to the end of the year would by taxable only by NY.

 

On your NY return, you would be able to claim an "other state credit" for the taxes paid to NJ, so you wouldn't be double-taxed.

 

This TurboTax reference explains how to amend a state return only:

I need to amend my state return (intuit.com)

 

Be sure to complete the non-resident NJ return before the home state NY return, so that the program can calculate and apply the credit correctly.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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