I live in NJ and work in NY. Which state am I resposible to for paying taxes. Do I have to pay taxes to both states if so why

NY (the state in which you work) will tax the income you earn while in their state.

NJ (the state in which you live) will also tax your income, but will give you credit for the taxes you paid to NY.

Since NY tax rates are higher than NJ, you will owe ZERO NJ taxes.

You will have to file tax returns with BOTH states, but you will only pay taxes to NY.

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Originally Posted by Lorraine Chanel

I live in NJ and work in NY. Which state am I resposible to for paying taxes. Do I have to pay taxes to both states if so why

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Youo will be required to file in both states. As for New Jersey they will give you a partial credit for taxes paid to New York based on a formula. In additon, New Jersey will tax all other income, ie: interest, dividends, etc.

It has been my experience that people who live in NJ and work in NY only pays NY taxes.

The credit NJ gives for taxes paid to NY almost always completely offsets the NJ Tax liability.

CPA lived in New Jersey worked in NY for 20 years. Paid taxes in both jurisdicitions every year.

Income level?

All but one of my clients are less than $150K.