Why do I have a NJ-1040NR-V Payment Voucher?

[mauralts]

When I did my taxes, it says I paid $4023.94 in state income tax. I work remotely for a company based in NJ and moved from NJ to PA in the middle of 2023. Based on what was my taxable income for the time I worked in NJ, my total tax was $554, so it says I should be refunded $3470. 

I submitted my Pennsylvania taxes and it says I owe $1784 in taxes to PA, which makes sense to me. However, as part of my tax forms generated by TurboTax, I also got a 2023 NJ-1040NR-V Payment Voucher which says I owe 2023 New Jersey income taxes totaling $1686.

This doesn't make sense to me. Why am I getting a refund from NJ but still owing NJ money? Also why is the amount of state taxes I owe PA and NJ more than the refund I am getting from NJ?

I submitted a NJ-165 to my employer when I moved which states that there is a reciprocal agreement between PA and NJ that makes me exempt from withholding NJ Income Tax, and my employer can withhold PA Income Tax on my behalf. However, my employer is not registered in PA for tax purposes, so says I have to have NJ taxes taken out. Which I guess is fine, but I still do not understand why I would own NJ money through the NJ-1040NR paperwork when I am already overpaying my NJ taxes and should be getting a refund.

Did I do something wrong on my taxes? Turbo Tax didn't let me fill out a form about getting double taxed due to the agreement between PA and NJ, but now it says I own then both money which is more than the amount I am being refunded. I would appreciate any advice on how to handle this.

Thanks!

[Vanessa A]

I also got a 2023 NJ-1040NR-V Payment Voucher which says I owe 2023 New Jersey income taxes totaling $1686....This doesn't make sense to me. Why am I getting a refund from NJ but still owing NJ money? If you are getting  a refund from NJ, then you would not have any payment due to NJ.  Where are you seeing the refund amount?  Look at your NJ return line 79 and 80.  This will tell you how much you are getting back or how much you owe.  If it shows you are getting back $3,470, then you do not need to send a check in.  If it shows you have an amount due, then you are not getting a refund and you will need to mail in the payment for $1,686.  You cannot owe and get a refund at the same time.  

Also, since NJ and PA have reciprocity, you will only pay income to your resident state.  So, for the time you lived in PA, you would not have any taxable income to NJ.  It would only be taxed by PA.  Be sure to fill out the correct forms with your employer so they know you are now a PA resident and not a NJ resident. 

 Also why is the amount of state taxes I owe PA and NJ more than the refund I am getting from NJ?  PA and NJ have different tax rates and different tax methods.  PA has a flat rate of 3.07% with very few credits or adjustments to income while NJ has a graduated rate with deductions and exemptions.  So it may be that in your situation, NJ offers an overall lower tax rate.  Each state is different with how they tax. 

As to whether you did something wrong.  Look at both of your tax forms and make sure that only the income you received while a resident of each state is listed as taxable income on that state. For both states you would be a part year resident.  If you see on one return that you have income listed for more than you earned while living there, walk back through the state interview section so you can make more adjustments to your income.  It is possible that you did not make an adjustment to one of the states.  

Be aware that if you do not have PA taxes withheld, even though they are being paid to NJ and you will get a refund for NJ when you do not live there, you will still be subject to penalties and interest from PA for underpayment of your taxes throughout the year.  So, if your employer will not withhold for PA, you may want to ask them to not withhold at all for the state, since it is the wrong state and then every quarter make a payment to PA for 3.07% of the amount you earned in that quarter. You can make the payment through MyPATH account or on the phone or by mail.