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VA and NJ state taxes

I live in Virginia and work from home. in January 2021 I began employment w/a new company based in NJ and has pulled taxes form both VA and NJ in 2021. I did not relocate. How do I file in each state?

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3 Replies

VA and NJ state taxes

You are a resident of VA and non resident of NJ. Complete the non resident return in TurboTax first. 

TomD8
Level 15

VA and NJ state taxes

You must file two state returns: a non-resident NJ return, and a resident VA return.

Your resident state of VA can tax all your income, regardless of its source. 

 

NJ can tax you as a non-resident only on NJ-source income.  Income is normally "sourced" where the work is actually performed.  However NJ suspended this rule during Covid, allowing NJ employers to "source" income according to the employer's jurisdiction.  This Covid-related suspension ended on October 1, 2021.

 

Thus your income prior to October 1st was sourced to NJ (your employer's jurisdiction); your income after that date is sourced to VA, where you actually perform the work.  NJ cannot tax a VA resident on VA-source income.  Therefore, on your non-resident NJ return, you would only report your income earned prior to October 1st.

 

You'll be able to claim a credit on your VA return for the taxes paid to NJ, so you won't be double-taxed.  As @Bsch4477 pointed out, in TT you should complete the non-resident state return first, so that the program can correctly calculate and apply the credit.

 

Source:  https://www.state.nj.us/treasury/taxation/covid19-payroll.shtml

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

VA and NJ state taxes

Thank you for your help. It worked perfectly on my taxes that I am completing now. 
thanks again 

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