Hi,

Forgive me if this has already been asked, but I'm somewhat new to tax filing...

I live in NJ and will start a new job in NY soon. I've read past inquiries and there's mention of NJ credit that may offset the taxes paid in NY...

1. Does this mean that I only get NY taxed on my bi-weekly income? (even though I have filled out applications for both NY and NJ income tax forms)

2. At the end of the year, when I file taxes, I have to file both for NY and NJ, is that correct? If so, how will the "credit" be offered? (Will just sending the pay stubs to the NJ income tax be enough?) Will the best way to handle this at the end of the year, be via some electronic tax software (like TaxCut), or use a personal accountant?

3. Did I need to fill in the portion of the tax form to withhold any money for my future paychecks?

Thanks for all the help,

Newbie

I'm trying to remember how it works from back when I was NY/CT employee. I think I had both state taxes taken out of my pay. Then at the end of the year I got a credit in NY and got my CT state taxes refunded.

You get the credit simply by completing your typical tax forms. You will have to file in both NY & NJ. There is a line that states something along the lines of "check here if you paid state taxes to a state you don't reside in"/ Its pretty simple.

The tax you pay to NY will be based solely on the income you earn in NY. They do not try to tax you on income earned in NJ (i.e. dividends and interest, income you may have from an NJ job, capital gains, etc). However, the non-resident NY tax form does require you to report all your income, to determine the tax rate that you will owe on the money you earned in NY.

You first complete the non-resident NY form. Then when you do your NJ form you again have to report all your income, then you calculate the tax owed as if it was all earned in NJ, then you subtract out the credit for out-of-state income tax paid to NY as Glinda noted.

As to whether you should do your own taxes or have a professional do them, that's really a matter of how comfortable you are and the amount of time you are willing to invest to learn about the tax rules and feel confident that you are doing it right. Personally I use Turbo tax, and find that unless there is something unusual going on (trust income, limited partnerships, etc), the tax software is pretty easy to use, even for reporting out-of-state income like this. You will have to buy both the NY and NJ state tax modules.

Ebaines posting is most comprehensive.

One note: the money you will spend on the federal TurboTax package PLUS the NY and NJ modules would be about what I would charge to prepare your return. Something to think about.

Thanks all, I really appreciate the help :) I'll use the advice, and if I run into any problems, I'll be back :)

Glad to help!