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karena027
New Member

Live in NY and telecommute in NY for a NJ company and go into NJ office to work 30 days a year. Employer takes out full NY and NJ taxes so how do I file my state returns

Do I prorate the total income for the 30 days worked in NJ and put that amount as my NJ income?

1 Reply
DanielV01
Expert Alumni

Live in NY and telecommute in NY for a NJ company and go into NJ office to work 30 days a year. Employer takes out full NY and NJ taxes so how do I file my state returns

It depends.  However, the most likely scenario is that your entire income is taxable both to New Jersey as well as to New York.  To lessen the double-taxation, you will receive a credit on your New York return for the amount of tax you must pay to NJ for the income you are earning there.  Here's why:

New Jersey follows a statute in their laws called the "convenience of the employer" principle.  By this statute, their position is that if you are telecommuting from your home on behalf of a company physically located in New Jersey, then you as an employee are liable for New Jersey tax because your working from home constitutes a "convenience to the employer".  (New York and Pennsylvania also have similar laws, but most other states do not).

Thus, unless you are telecommuting from a location other than your home, you will not need to prorate or allocate your income.  In TurboTax, you prepare the New Jersey nonresident return first, and then the New York resident return.  This way, your credit in New York for taxes paid to another state will be correctly calculated.  Because of this credit, and New York's generally higher tax rate than New Jersey, you actually end up with the same amount of final tax in the end, but this is the correct way to report it.

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