W4 when working in a different state

[Sharielly]

Hi, i am a NYS resident, but i work in NJ; how can i ensure i am getting taxed the appropriate amount? Last year i had to owe in state taxes, so i want to make sure i can correct that for this upcoming year tax filing. 

Thank you!

[JBedford]

Hi, @Sharielly ! The main thing to keep in mind in your situation is that you will be taxed on this income in both NY and NJ. BUT, you can claim a credit on your NY return for the taxes paid to NJ, so you won't be double-taxed. To do this in TurboTax, you want to make sure you complete the NJ return first, so that the amount of tax paid to NJ has been calculated. Then, when you do the NY return, be sure to visit the "credit for taxes paid to other states" section, which can be found under the Credits heading. TurboTax will pull in the information from the NJ return. 

If you did all this correctly last year but still owed more than you wanted to one or both states, then one solution could be to simply increase your state withholding to cover that amount. For example, if you owed $5,000 to NY, and you're paid 26 times per year, then request to have an additional $192 withheld per paycheck. I usually suggest adjusting withholding if you owe more than $1,000 when you file your return. If you owe less than that, I personally feel like that's a fine result, just make sure to budget for it. Hope this helps! 

[Holly W]

Hello Sharielly,

I see that you are a NYC resident and work in NJ.  I'm not sure which state you owed, but in your case, you will be taxed in both states, the state you reside, and the state you work in.  Per New York website:  https://www.tax.ny.gov/pit/file/nonresident-faqs.htm#:~:text=A%20person%20who%20lives%20in,double%20...

If I live in New York but work in another state, am I taxed twice?

A person who lives in one state but works in another may have tax liability in both states, but typically will receive a tax credit in their state of residence to eliminate double taxation of that income.

If you were a full-year or part-year resident of New York State and you had income sourced to and taxed by another state you may claim a nonrefundable resident credit against your New York State tax. This credit is allowable only for the portion of the tax that applies to income sourced to and taxed by the other taxing authority while you were a New York State resident.  

You can opt to have taxes taken for both states.  When filling out your taxes, you always want to do your non resident first to find out your tax liability for that state, so you can claim it as a credit on your Resident state.

New York Withholding form:  https://www.tax.ny.gov/pdf/current_forms/it/it2104_fill_in.pdf 

New Jersey Withholding form:  https://www.state.nj.us/treasury/taxation/pdf/current/njw4.pdf 

[Sharielly]

Thank you for getting back to me so promptly. 

I will look for this in the 2023 taxes.

thank you 

[Sharielly]

A follow up question- would i be able to claim that credit i missed this year for next year?

[Holly W]

Hi there,

If you feel you missed that credit in 2022, you would want to amend your 2022 taxes for New York.  
Here is the link for instructions on how to amend if you used TurboTax Online:  https://turbotax.intuit.com/tax-tips/amend-return/how-to-correct-federal-tax-returns/L67t0F7il .  Also, we have agents that are more than happy to assist with the process.

[Sharielly]

okay thank you for your help and the time

[Holly W]

You're very welcome!  Thank you for the opportunity to answer your questions!