Hi,

I have a question. If I were to earn 80k working in Manhattan NYC but living in NJ City, what would be by income tax ?

I understand there are layers of tax like - Federal, SS, Medicare, State and City tax in some cases.

The confusion is around if I would be liable to pay NY state tax ? I assume I won't be liable for the NY City tax as I do not reside there.

Do I pay the NY State tax and claim that as a deduction agaist NJ State tax ? What if the NJ state tax is lower than the NY State tax withheld, would be deduction be appropriated against my salary or is limited to NJ tax liablity ?

Thanks in advance.

I do realise juse then that similar question has been asked before. I just read a few pages on this thread.

I used the calc at http://www.paycheckcity.com/netpaycalc/netpayCalcResult.asp

Is it fair to say, I can get a fair approx take hime if I said the following :
NY State
90k per annum
Married filed jointly
Not a NY City resident (as living in NJ)

This is what I get :
Monthly Gross Pay
$7,500.00
Federal Withholding
$1,109.00
Social Security
$465.00
Medicare
$108.75
New York
$438.00
NY SDI
$2.60

Net Pay
$5,376.65

Now I do understand I will hve to file NJ taxes where I would compute NJ taxes which is something like 254 per month and claim the NY taxes which is 438 as deduction but all I want to know is after all that legal filing and all that, how much does it mean take home that's all..

Thanks.

If you commute daily to NY and work there, your NY income is subject to NY State tax.

Since you are resident of NJ, you must file NJ tax return and report your worldwide income. On the NJ tax return, you will claim credit for taxes paid to NY.
Read about taxes for two states: Your U.S. Tax Return: Working or Living in Two or More states (http://taxipay.blogspot.com/2008/06/working-in-two-or-more-states.html)

I am slowly learning!
Ok, so on paycheckcity, as I said above - I will put all the details (90k,married joint filing,non NYC resident-the net home comes out to be :::

Monthly Gross Pay
$7,500.00
Federal Withholding
$1,109.00
Social Security
$465.00
Medicare
$108.75
New York
$438.00
NY SDI
$2.60

Net Pay
$5,376.65

On the blog it says "On the NJ return, claim credit for taxes paid to NY"

The question is - what is "taxes paid to NY" include ? The state taxes ?

Let's say the W2 income from NYC is my only income-In that scenario, what is my NJ liability ?

-Neil

Neil - Mukata is talking about what happens next April when you file your state income tax returns. You will first fill out a NY State non-resident return, to determine your total NY State tax bill for 2008. You then fill out a NJ state income tax return, and what you'll find is that you must report all your income to NJ, and calculate an initial tax amount based on NJ's rates, but then you get to take a credit for taxes paid to other jursidictions, which means NY State in your case. Since you already filled out the NY State non-resident tax form you will know at that point how much to claim. If your New York wages are your only income, the amount of that credit should be larger than the initial NJ tax calculation, because NY State's tax rates are higher than NJ's, and you'll end up owing NJ nothing, but you still must file the return.

You are correct that you do not pay NY City tax, as only NYC residents pay that.

Yup, thanks
Totally ustand the process. The question is, now that NJ rates are less than NY - i.e. taxes paid are more than due (assume the NY slaary is the only income), then can the excess over NJ taxes be claimed towards other taes (fed,ssn,medicare) etc or is the NY tax credit only limited to NJ tax credit ?

Thanks

The question is, now that NJ rates are less than NY - i.e. taxes paid are more than due (assume the NY slaary is the only income), then can the excess over NJ taxes be claimed towards other taes (fed,ssn,medicare) etc or is the NY tax credit only limited to NJ tax credit ?


Sorry, I don't follow the question. What do you mean by "taxes paid ar more than due?" The amount withheld from your paycheck for NY State tax should be pretty close to actual amount due - otherwise you may want to adjust the number of allowancs on your W4. The credit that NJ gives you is capped at the amount of tax you would pay IF you worked in NJ. NJ is not going to send you a check for the additional amount of NY's taxes over what NJ's would be if you worked there, if that' what you're asking.

"The credit that NJ gives you is capped at the amount of tax you would pay IF you worked in NJ. NJ is not going to send you a check for the additional amount of NY's taxes over what NJ's would be if you worked there, if that' what you're asking."

Exactly what I was after. Basically I wanted to know - given that NY rates are higher than NJ, is the NY state tax capped to the NJ dues.

Sorry a novice so stupid questions!

Thanks