@CuriousWhale - I see no downside to increasing your exemptions on the state withholdings since you beleive you are way over withheld. You just have to decide if all the complexity (remember you have to change it back in January) is worth it. Worst case, you will settle up with NJ in April and receive a big refund.
something else to consider, if you itemize, how does that affect hitting the SALT limit in 2022 and 2023? NJ is one of the states where a large number of tax payers are subject to SALT. So, for example, if you were to do nothing, and hit the SALT limit in 2022 (because the withholdings are so high), but not hit the SALT limit in 2023 (remember that large state refund would reduce the taxes paid in 2023), then it would make sense to stop the withholdings now so everything is smoothed out ... if you take the standard deduction or would hit the SALT limit in both years even if you did nothing, then this is not going to matter.
