Hi,
I have a query:
I am planning to live in NJ but work in NY with a company incorporated in NY.

1. What state taxes will I pay?
2. Will I pay NY city Tax at all?
3. Where do I find the income tax slabs for NY and NJ?
4. I have heard that both states will deduct personal income tax but later on I will get credit from one state... this is confusing for me. Which state gives credit and when?
5. Do I have to tell my employer something in advance to help reduce double taxation.
Extremely confused...
Confusius :-)

1) You will have to file for both, but NJ will give you a credit for the NY taxes paid. Because NY tax rates are higher than NJ, you will not have to pay NJ taxes.

2) No; NYC taxes are for resident of the city only.

3) Each state has a website which will allow you to download the forms needd.

4) See Item #1.

5) Have employer withhold ONLY NY state taxes; no NJ taxes need be withheld.

Thanks,
Just to clarify... so let's say my Income is 100,000 and the state tax slab for NJ is 20% and NY is 25%. So I will have to file 2 taxes amounting to 20K in NJ and 25K in NY... later on when tax forms get processed, NJ will credit me for 25K... is this right? Not sure what you meant by "you will not have to pay NJ taxes."... in this scenario, I am still paying the regular 20K NJ taxes
Also, if you could please give me the link of the tax slabs... I have been on the web site of both NJ and NY and can't figure where they hide the tax slabs:-)
Aseem

Quote:

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Originally Posted by AtlantaTaxExpert

1) You will have to file for both, but NJ will give you a credit for the NY taxes paid. Because NY tax rates are higher than NJ, you will not have to pay NJ taxes.

2) No; NYC taxes are for resident of the city only.

3) Each state has a website which will allow you to download the forms needd.

4) See Item #1.

5) Have employer withhold ONLY NY state taxes; no NJ taxes need be withheld.

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Here is New York: http://www.tax.state.ny.us/

Here is New Jersey: http://www.state.nj.us/treasury/index.html.

In your scenario, the 25% tax paid to NY completely offsets the NJ 20% tax.

I would appreciate it if you can explain what is "offset"? Does that mean I only pay the NJ tax amount in effect?

Thanks a lot!

Quote:

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Originally Posted by AtlantaTaxExpert

In your scenario, the 25% tax paid to NY completely offsets the NJ 20% tax.

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In the scenario the NY tax was $25K and the NJ tax was $20K. On your NJ return you would indicate having paid NY $25K. Thereby offsetting your NJ liability making what you owe NJ, $0.

Scott Gem says it all regarding "offset"!

Quote:

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Originally Posted by AtlantaTaxExpert

1) You will have to file for both, but NJ will give you a credit for the NY taxes paid. Because NY tax rates are higher than NJ, you will not have to pay NJ taxes.

2) No; NYC taxes are for resident of the city only.

3) Each state has a website which will allow you to download the forms needd.

4) See Item #1.

5) Have employer withhold ONLY NY state taxes; no NJ taxes need be withheld.

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I am using Turbo tax for both NJS and NYS and I get really screwed. I owe NJ a bundle and what I get back from NYS doesn't begin to cover it.

Unfortunately, I cannot check your work.

Quote:

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Originally Posted by AtlantaTaxExpert

Unfortunately, I cannot check your work.

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I understand. It seems that I get taxed on half of my husband's pension on my NY form and, of course, dividends, interest and such on both NY & NJ. There is no real trade off between NY & NJ.

That is possible; the only way I would know for sure would be to prepare your return, which I CAN do for a fee!

I'm looking into this as well... working in NYC, currently living in NJ but used to live at a permanent home address in NYC. It depends on 1. Do you also have an address in NY? How much time do you spend in NY? --> Determine if you are a part-year resident of NY or a nonresident of NY. If you are moving out of NYC or Yonkers you may need to fill out "Form IT 360.1- for change of city resident status".
Otherwise, you will need Form IT-203.

Then for NJ, you will need to file for a credit. You will need form SCHEDULE A and NJ-1040 income tax return w/ line 40 filled out for which jurisdiction (i.e. the other qualified state or area you're working in and paying income tax to).

These two documents helped clear up most of my questions, it's still confusing but I think I know at the very least what forms I will need:

New Jersey
http://www.state.nj.us/treasury/taxation/publit1.shtml >> click "Credit for Taxes Paid to Other Jurisdictions (Wage Income)" [http://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git3w.pdf]

New York:
http://www.tax.state.ny.us/pdf/publications/income/pub88.pdf (General Tax Information for NYS nonresidents and part-year residents)
& Notice the distinction between domicile and permanent place of abode in the NY PDF.

I'm no authority on the subject, but I found these resources useful. The forms you fill out depend on your unique circumstance, so be sure to check if you need anything else. Hope these help!

-N

I'm looking into this as well... working in NYC, currently living in NJ but used to live at a permanent home address in NYC. It depends on 1. Do you also have an address in NY? How much time do you spend in NY? --> Determine if you are a part-year resident of NY or a nonresident of NY. If you are moving out of NYC or Yonkers you may need to fill out "Form IT 360.1- for change of city resident status".
Otherwise, you will need Form IT-203.

Then for NJ, you will need to file for a credit. You will need form SCHEDULE A and NJ-1040 income tax return w/ line 40 filled out for which jurisdiction (i.e. the other qualified state or area you're working in and paying income tax to).

These two documents helped clear up most of my questions, it's still confusing but I think I know at the very least what forms I will need:

New Jersey
http://www.state.nj.us/treasury/taxation/publit1.shtml >> click "Credit for Taxes Paid to Other Jurisdictions (Wage Income)" [http://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git3w.pdf]

New York:
http://www.tax.state.ny.us/pdf/publications/income/pub88.pdf (General Tax Information for NYS nonresidents and part-year residents)
& Notice the distinction between domicile and permanent place of abode in the NY PDF.

I'm no authority on the subject, but I found these resources useful. The forms you fill out depend on your unique circumstance, so be sure to check if you need anything else. Hope these help!

-N

I found these useful:

Here for NJ :NJ Division of Taxation - New Jersey Income Tax Publications >> http://www.state.nj.us/treasury/taxa...i-ee/git3w.pdf

NY:http://www.tax.state.ny.us/pdf/publi...come/pub88.pdf

Most likely you need form IT-203, Form IT 360.1 (change of city resident status), NJ Schedule A, NJ-1040 w/ line 40 jurisdiction code