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Level 1

Question

I live in NJ but work in NY, should I be paying taxes from my pay to both states on every paycheck? I do not want to be double tax.

Forum|Forum|7 years ago
May 31, 2019
4 replies
22 views

My company does not have a clue on what to, and right now I am only paying to NJ, I do not want to owe a lot to NY when I file my taxes.

rjs

Level 15

Since you work in NY, you should be having NY tax withheld from your paycheck, and not NJ tax. Your pay for working in NY is fully taxable by NY. You will owe little or no tax to NJ because you will get a credit on your NJ tax return for a large portion of the tax that you pay to NY.

Don't worry about the NJ tax that has already been withheld this year. You will get it back when you file your tax returns at the end of the year. You won't be double taxed. But you should have your employer correct your withholding for the rest of the year, and do it as soon as possible. You should consider having extra NY tax withheld for the rest of this year, to make up for the NY tax that should have been withheld on what you already earned in NY this year. If you do that, make sure you remember to remove the extra withholding at the beginning of next year.

When you file your tax returns at the end of the year you will file a NY nonresident tax return and a NJ resident tax return. Prepare your NY nonresident return first, then your NJ resident return.

thiagosrpt

Level 2

Hi RJS,

I came across your response and it makes sense. Do you know if filing a NY nonresident tax return and a NJ resident tax return can be done through turbo tax?

Thanks,

Thiago

rjs

Level 15

@thiagosrpt Yes, you can file a New York nonresident tax return and a New Jersey resident tax return with TurboTax.

Lilahgwen

Level 2

Same issue.

Last summer, (year 2020), my job taxed me in my resident state New Jersey because was telecommuting temporarily and was able to report to the New York office.

From my understanding, my wages are still considered NY source income for the year. Regardless, if I was telecommuting.

My W2, reports the allocated (prorated) Gross Wages for New York in the summary section.

Then in Box 16, the wages for New York, equals Federal wages for the entire year.

Couple Questuons:

(1) Should I request a new W2 from my company, to correct the Gross Wages in New York for the full year? Or would it work itself out when I file my returns because box 16 for NY wages is being reported the same as Federal, and just need to pay the additional taxes?

(2) Will I still be able to claim my NJ credit as a resident?

ThomasM125

Level 15

You don't need to correct your W-2 if your wages belongs to New York. You still file a New Jersey tax return as a resident.

When you file your New York return, your total income will show up in New York as taxable, but once your tax is calculated, it can be reduced by a percentage of your income earned while out of state.

In New Jersey, you will get credit for any tax paid to New York. So, you won't get double taxed even though it may appear that way at first.

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ecannan11

Level 4

In the majority of these cases do you wind up owing to NY? Example 2017 our gross income broke down to 70% earnings in NJ and 30% in NY. In 2018 it was about 50/50.

csrirama002

Level 2

Hi All,

I am in the same situation here. Based on my W2 information and taxes withheld for both NY and NJ, I am getting a tax credit from NJ, however it states I have under-payed my NY tax., i.e I still have to pay some tax to NY. I was wondering if this is possible and if there is any explanation to it?

FangxiaL

Level 10

It is quite possible for a balance due to NY if the withholding is not enough to cover the tax liability. If you are a NJ resident and work in NY, you have NY source of income and you pay income tax to NY. You are a NJ resident and you pay income tax there but you receive a credit on your NJ return for taxes paid to NY.

When you prepare your state tax returns, make sure to prepare the non-resident state first so that the tax credit can carry over to your resident state tax return properly.

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Isamaniego2

Level 2

Hey I’m young so I don’t know about any of this. If I live in NJ but work in NY and I was recently told I could work hybrid

, would i be able to start a c2c to avoid paying taxes in NY?

MarilynG

Level 15

If you physically work in New York, you are subject to NY tax as a 'non-resident''

However, you get credit on your New Jersey return for tax paid to New York.

Click this link for more info on How to File a Non-Resident State Return.

However, if you are an 'independent contractor' you may not be subject to NY tax (only NJ).

This link has details about New York Independent Contractors.

The major difference between C2C and 1099 is that with C2C, you don't have to pay self-employment taxes on your income. However, you must pay yourself a set salary, as well as pay all required employee and employer taxes.

Here's more info on Corp to Corp.

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jschwartz2425

Level 2

I have a similar question-- I worked for an NY based company half of 2021, but lived in NJ all of 2021. I had $43,613 in NY AGI and owed around $2,168 to NY. I had $2,922 withheld, so will be getting a refund from NY. My question is if NJ did not withhold from that income and my NJ state wages was $45,095, do I still qualify for the credit for taxes paid in another state? In other words, would I put that $43,613 as income taxed by NJ & NY even though NJ did not withhold?