You are in about the same position either way. You pay New Jersey income tax on the money you earn for working in New Jersey. Since you live in New York, New York taxes all of your income, no matter where the income is from. But you get a credit on your New York tax return (the "resident credit") for the tax that you pay to New Jersey. Since New York tax rates are higher than New Jersey, the combined amount that you end up paying to both states is equal to the New York tax rate on your income.