Live and work in Indiana but paid out of NJ

Forum|Forum|5 years ago
March 24, 2021
2 replies
8 views

I am so confused. I live and work (home office) in Indiana, but the company I work for is based out for NJ. They did withhold NJ taxes. How do I file this? I tried to run a nonresident NJ return, but it keeps telling me I owe NJ $640, is that right?

Not A Product Question

ToddL99

Level 13

If you live and work exclusively in IN, then you are not subject to NJ income tax on your earnings.

(Some states - New York, Arkansas, Connecticut, Delaware, Nebraska and Pennsylvania - apply a different standard that may require you to pay tax to your employer's home state AND your home state, but not NJ)

File a non-resident NJ tax return and allocate all your income to IN (none to NJ).

In the NJ tax program, the screen will look like this:

TomD8

Alumni - Champ

New Jersey Statute 54A:5-8 (2) defines NJ-source income for a non-resident of NJ as income earned in connection with a trade, profession, occupation carried on in this State or for the rendition of personal services performed in this State.

https://law.justia.com/codes/new-jersey/2018/title-54a/chapter-5/section-54a-5-8/

So if you were a full-year resident of IN and you never worked in NJ, your remote income is not subject to NJ taxation.

However, if NJ taxes were withheld from your pay, you'd have to file a non-resident NJ return, allocating zero income to NJ, in order to receive a refund of those taxes.

Your income is of course fully taxable by your home state of IN.

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