I currently work for a temp agency based in New York City. The actual office where I work is in New Jersey, and I live in New Jersey. The income from this job is about $13,000. What is my tax liability? Should I file in both states? Obviously I'd want to file in NJ because I'd wind up paying less in taxes.

If you live in New Jersey and work in New Jersey, your income is not subject to NY tax.

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Originally Posted by MukatA

If you live in New Jersey and work in New Jersey, your income is not subject to NY tax.

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So how do I file my taxes, because my agency won't change my withholding?

You file in BOTH states. You PAY taxes to NJ.

You file a NY state tax return as a non-resident and explain that the money was NOT earned within the borders of the state and claim a refund of all taxes withheld.

This is quite common in NY, so NY state should refund the money without question.

Now, as for your employer, they do not have a choice in the matter. If you work and live in NJ, then ONLY NJ state taxes should be withheld.

Since they do not believe you, tell them to make a phone call to the NY state tax authorities for guidance.

HAPPY ENDING!

I called payroll, and they fixed my issue for 2008. Turns out there are good payroll staff members, and ones who don't know what they are talking about.

I will use AtlantaTaxExpert's tip for '07.

Thanks everyone!

Glad to help!

Please remember that I have a number of NJ/NY clients and am quite adept at filing state returns for BOTH states.

You would find my fees to be most reasonable, and I have references from my NJ/NY clients.