@rryanc25 wrote:
Thanks again! One more follow-up:
My employer fully supports my remote work status and agrees that I likely don't owe the State of NJ taxes given my status. However, their stance is that there is too many hoops to jump through to establish me as a resident of South Dakota, where they do no business.
I'm being told I can set my NJ income tax withhold to $0 through HR/payroll company. The W-2 would still list NJ wages in boxes 15 & 16. Would I still file a return to NJ?
Yes, if you have box 16 wages, New Jersey will want to match that to a tax return.
As already discussed, for the year you move, you would file both a resident and a non-resident return, allocating your income accordingly. If you moved October 1 for example, and your salary is $100,000, your resident return would allocate $75,000 to New Jersey, and your non-resident return would show the $25,000 of income but allocate zero to NJ (that way, NJ sees the full salary and also sees how you allocated it.). NJ may come back and ask for more details, of course.
For the next year when you are a NJ non-resident for the whole year, you would file an NJ non-resident return showing the box 16 wages and allocating zero percent to New Jersey, so no taxes would be owed.
Lastly, if your company uses a separate payroll processing company for your withholding and W-2, you should talk to them about your residency, they may be more flexible than your employer.
