Taxe Withholding

[Mayank_Singhal]

Hi,

I am living in NJ and working in NYC. My employer is withholding only NYC state taxes and not the NJ state taxes. Is this an issue? If yes, then what should i do.

[Critter]

It is not an issue if your only income is coming from NY ... when you complete the 2 state returns in the program you MUST complete the NY return first and then the NJ return so you get credit for the NY taxes paid on the NJ return. 

[SweetieJean]

Just a note that NJ will not necessarily credit you for 100% of the NYC taxes paid, just the amount  that would have been due to NJ. If the amount  you would owe NJ is more (due to the difference between tax rates in NYC and NJ) you will have to pay NJ the extra.  Also NJ will be due taxes on any other income (such as interest) that you have.