Multiple State Filings?

[angusduncan]

My daughter lives and works in New York. Her company headquarters are in New Jersey, but she has never been in New Jersey for work, but the company withheld state income taxes for New Jersey as well as New York. Does she have to file a state return for New Jersey as well or just for New York?

[LenaH]

Your daughter would have to file a resident New York return and a nonresident New Jersey return because she had state income tax withheld for New Jersey. In order to get a refund of the New Jersey state income paid, she needs to file a return. 

Generally, New Jersey sourcing rules dictate that income is sourced based on where the service or employment is performed. However, during the temporary period of the COVID-19 pandemic, wage income will continue to be sourced as determined by the employer in accordance with the employer’s jurisdiction. Since you stated your daughter has never been to New Jersey for work, it does not seem like she is telecommuting due to Covid-19. In that case, it would be New York sourced income.

Telecommuter COVID-19 Employer and Employee FAQ

[angusduncan]

So if she is working from her apartment in New York for the company then she has to file a non-resident NJ tax return, correct?

[ToddL99]

If she lives and works in New York, her income is only subject to NY tax. She will have to file a NJ non-resident tax return in order to get a refund of taxes withheld for NJ.

Her employer should not have withheld NJ tax from her income - she should ask her employer to cease withholding NJ tax from her pay..