My office is in NJ and I live in NY. But I worked from home in NY most of 2020 due to the pandemic. Should I allocate my NJ wages to NY?

[icerainer]

I usually work in NJ and live in NY. Due to the pandemic, I have not worked in my NJ office since March of 2020. 

When I do my NJ taxes, in my NJ Income Allocations, should I allocate most of my NJ wages to NY (say 70% NY wages/30% NJ wages) ? 

[MaryK4]

Yes, you can allocate based on where you did the work.

New Jersey sourcing rules dictate that income is sourced based on where the service or employment is performed based on a day’s method of allocation. However, during the temporary period of COVID-19 pandemic, wage income will continue to be sourced as determined by the employer in accordance with the employer’s jurisdiction.

[icerainer]

Thanks! Just to confirm, due to the special Covid situation in 2020, I should file wages 100% NJ income as if I worked in the NJ office the whole year and get a credit on my NY return. Non of the wages would be allocated to NY income. 

[DMarkM1 · Accepted solution]

Not quite.  NY is your resident state. There is no allocation involved there.  You are taxed by NY on all income from all sources by your resident state.  The non-resident state in this case NJ is where you get to allocate and in your circumstance that would be 100% of your wages allocate to NJ and then you get a credit on your NY return for the taxes paid to NJ to mitigate the double taxation on those wages.  

[WBM3]

I live in TX and work for a NJ employer.  Since I did all my work outside of NJ, do I have any NJ earnings?   

[DanielV01]

New Jersey used to follow the "convenience to the employer" principle that allowed them to tax a telecommuter working on behalf of  a New Jersey employer but living outside of the state.  However, it seems that they have dropped that stance, which would mean that you would only file a New Jersey return if New Jersey tax has been withheld from your income.

[Dfeliciano1972]

the main office is in NY but I never stepped foot in NY I work in NJ office. Why do I have to pay taxes to both?

[TomD8]

@Dfeliciano1972 --

If you're a full-year non-resident of New Yok, and you never physically worked in New York during the tax year, not even for a single day, then you have no income tax obligation to the state of New York.