It depends. NJ imposed a new rule in 2023 that says if your state has a convenience of the employer rule, and you are working for a NJ company, then if that rule would apply to you if the roles were reversed (you lived in NJ and worked for a NY employer and had to pay taxes to NY under the convenience of the employer rule) then you would have to pay taxes to NJ.
So, if you do not pass the NY convenience of the employer rule, you would need to file a NJ non resident return. You would file the NJ return first and then the NY return, claiming a credit for taxes paid to NJ on your NY return.
Does New Jersey have its own Convenience of the Employer Rule?
New Jersey does not have its own Convenience of the Employer Rule. However, P.L.2023, c.125 was enacted on July 21, 2023, to provide that this State will apply another state’s Convenience of the Employer Rule on nonresidents, which would be the same as the one in the nonresident’s home state. For example, compensation earned by a telecommuting New York resident working for a New Jersey employer will be deemed New Jersey source income by applying New York’s Convenience of the Employer Rule.
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