I'm contracting for a company in NYC, but I work from home in NJ 100%. They're taking NY taxes, but shouldn't I be taxed based on where the actual work is performed?

[TomD8]

Very few states tax non-resident telecommuters, but NY happens to be one state that does - depending on circumstances.

New York uses the "convenience of the employer" rule to determine if the income of non-resident employees of an NY-based business are subject to NY state income tax.  This means that if you are working from NJ because it's convenient to you rather than to your employer, the income you earn is subject to NY income tax.

The law is explained in detail here:  https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

Your income is subject to NJ income tax regardless, because you are a NJ resident.  So you may have to file in both states.

[IsabellaG]

Unfortunately, you'll be taxed in both states. New York is one of the states that tax remote employees when the employer has a location in NY State unless you are required to work out of state for the convenience of the employer. See this link to the State of New York's memorandum regarding telecommuters.

[jennifercassese]

Thank you. Where would I file for unemployment once the contract ends, NY or NJ. I am working remotely from NJ full time. 

[jennifercassese]

Thank you. Where would I file for unemployment once the contract ends, NY or NJ. I am working remotely from NJ full time. 

[jennifercassese]

Thank you. Where would I file for unemployment once the contract ends, NY or NJ. I am working remotely from NJ full time. 

[Anonymous]

filing for UC is not a tax question.  contact each states UC bureau to find out what you should do.