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I live in NJ and work in NYC. Why do I owe taxes to NJ?

My situation: I live in NJ and work in NYC. My employer (W-2) doesn't withhold NJ taxes. I did one freelance job in NY (received 1099) which the company didn't withhold taxes for, and I understand I will have to pay for that part. 

But for some reason, I get a sizable amount of refund from NYS and federal, but the system shows that I owe taxes to NJ. The amount of refund is greater than the taxes owed to NJ so I can use that to pay for NJ. But I don't understand if I forgot to remove NY wages - I thought I would be taxed for the freelance NYC job within the NYS parameter - why do I owe taxes to NJ? 

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4 Replies
DS30
New Member

I live in NJ and work in NYC. Why do I owe taxes to NJ?

Just make sure that you are working on your NY nonresident state return first then you should get a full tax credit on your NJ resident state income tax return for all taxes paid on your NY nonresident state income tax return.

You will need to report the full wages and the 1099-MISC on both returns. (Just make sure that the income is not being double counted on each state.) You will get a tax credit in NJ for NY taxes paid on the same income.

You can look at your NJ state tax summary to make sure that your W-2 income isn't being counted twice (once as NY sourced income and then again as income from all sources on your NJ state return).

To preview NJ or NY Tax Summary:

  • TurboTax Online sign-in, click Here
  • Select "Take me to my Return"
  • Go to "Tax Tools" (on the side bar) then  "Tools"
  • Under the Tools Center, select "view tax summary"
  • Select "NJ (or NY) Tax Summary"

You will want to work on your non-resident NY state tax return first. You will then take a tax credit from your non-resident NY taxes on your resident NJ state tax return. (Please note that you will only get a tax credit for your NY taxes up to the amount of NJ taxes that would have been paid if the income was earned in NJ). 

Just follow the TurboTax guide when working on your states (remembering to do your non-resident state return first) and TurboTax will do all the calculations and credits to your resident states return

Here is additional information about filing in multiple states (select "see more answer" to view the entire attachment)

 

https://ttlc.intuit.com/replies/3300797


ecannan11
Returning Member

I live in NJ and work in NYC. Why do I owe taxes to NJ?

So what happens if you filed your federal and NJ but completely forgot to submit the non-resident to NY? For instance I successfully filed federal and NJ for 2017 and 2018, but somehow completely missed the non-resident (first time working in NYC). I went ahead and completed and filed both and amended the NJ for each year. 

 

How will this be processed? 

Irene2805
Expert Alumni

I live in NJ and work in NYC. Why do I owe taxes to NJ?

It sounds as if you did everything correctly.  The taxing jurisdictions will process the original returns you submitted.  Then, when NJ receives the amended return they will process that as well.

 

NJ will most likely process the returns separately, first the original return, issuing a refund or processing the balance due.  Then process the amended return separately issuing a refund or process the balance due, separately from the original return.

 

@ecannan11

ecannan11
Returning Member

I live in NJ and work in NYC. Why do I owe taxes to NJ?

The forms sent to NY would be the originals only as I never filed back in 2017 and 2018. I really can't believe we filed everything else and overlooked the non-resident form. 

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