If I live part time in NJ and part time in NC, and I am a teleworker how does this affect my state income tax.

You pay the taxes to any state in which you physically work and any state in which you physically live, while claiming a credit for the taxes paid in the work state against the taxes owed in the residential state.

Hence, if you work in NJ and live in NC, you pay NJ and claim a credit against the NC tax.

As for your teleworking, you pay in the state where you are doing the physical work, NOT where the employer is located.

Did you recently move from one state to the other, or do you actually split time between the two?

Assuming the latter, then you should do the following:

1. Determine which residence is your primary abode. This should be the one you spend the most nights in for a given year. For the other state you are a non-resident worker.

2. You pay taxes to the non-resident state only on the income you earn while working there.

3. You pay taxes to the residency state on your full annual income, and take a credit for income taxes you paid to the non-resident state.

4. I suggest that you have your employer withhold taxes for your resident state, but that you consider making estimated tax payments to the non-resident state so that you don't run into an issue of underpayment or late payment penalties or interest.