NJ Resident Received 1099 NEC from Ohio

[brd3001]

Hi,

I am a New Jersey resident and an employee based in New Jersey. I received W2 from employer in New Jersey. Additionally, I did some consulting work for another corporation that is based out of Ohio while based in New Jersey. The Ohio based corporation sent me 1099 NEC. Do I have to file return in Ohio? Or will just filing my state return in New Jersey be sufficient? 

A simple answer would be really helpful. 

Thanks!

Brinda 

[DianeW777]

Yes, you must file a tax return for the state of Ohio (OH) based on their tax law. Your business is not situated in OH, however you are doing business in OH.

Who Must File - Ohio State Income Tax

Every Ohio resident and every part-year resident is subject to the Ohio income tax. Every nonresident having Ohio-sourced income must also file. Examples of Ohio-sourced income include, but are not limited to:

• Wages earned in Ohio;
• Ohio lottery winnings;
• Ohio casino gaming winnings;
• Ohio Sports Gaming Winnings;
• Income or gain from Ohio property;
• Income or gain from a sole proprietorship doing business in Ohio; AND
• Income or gain from a pass-through entity doing business in Ohio.

State Returns - Assumes both states require income tax returns to be filed: 

1. Report the income on each state return that is from the nonresident state
2. Report it on your resident state and receive credit for taxes paid to another state (must report worldwide income).

Credit for taxes paid to another state is allowed by a resident state when the same income is being taxed to another state.  Your resident state does not want you to pay tax twice on the same income. The credit that is allowed will be the lesser of:

1. the tax liability actually charged by the nonresident state, OR
2. the tax liability that would have been charged by your resident state

In most cases complete your nonresident state first.