Living and working in NYC but work for a NJ company and NJ taxes (no NY taxes) are being taken out of check every week b. How do I file my taxes?

[jrodriguez0886]

I have been working for a company that is located in New Jersey for the last four years and every year I want blow my brains out come tax time. I can never get the right answer. 

My employer taxes NJ taxes out of my check every week and no NY taxes. How do I file my taxes? This year I found an article stating if you work remotely you file your non resident return and put you earned $0 since you didn't earn any money there. By doing that you will get all the taxes you paid back in a refund, which sounds great. But what about NY? It shows I would owe NY close to $6300 for the year and I was only getting back $2,768. I am already in the hole for $6000 in taxes I owe NY for the same problem but I filed those return showing that I worked in NJ which I never did.

I keep getting different stories about how to file correctly. Please help!!!!!

[DanielV01]

You need your employer to take out taxes for both NJ and NY.  Since you are telecommuting, NJ is one of 5 states that does consider your income to be taxable in NJ.  It is always taxable in your resident state, which is NY, and as a NYC resident you are taxed there also.  What you actually need to is file a NJ nonresident return, and then NY will give you a credit for the amount of tax you pay to NJ on that same income.

The end result is the same.  You'd get less NJ refund, but your NY tax due is reduced by the same amount.  In order to cover the shortfall, you need to have your employer take out additional taxes to NY, and thus you don't have this issue going forward.

[jrodriguez0886]

Thats what I did the last two years but what I don't understand why is the balanced always so much? Always over $3000. So what does the credit do?

[DanielV01]

Tax that you pay to NJ is subtracted (in essence) from the tax you pay to NY on the same income, to reduce double-taxation.  The real issue in your case is that you need to have your employer take out NY tax.  You are taxed both to the city and the state, which makes NY taxes considerably more than NJ tax.  Even with the credit, you will not pay in enough NY tax if your employer does not take out any additional NY tax.

[mikicoco1]

What form that "NY will give you a credit for the amount of tax you pay to NJ on that same income."?  I have paid both NYS and NJ last year. Can you tell how to get credit back from NY?