Hello,

I work in New York and live in NJ for entire year. On my w2 my employer has listed income in both states on line 15 and 17. Where as I didn't work in NJ and I have no income in state of New Jersey. Is this normal?

15. State--------EID----------------16. State wages, tips, etc. ----------17. State income tax
NJ----------xxx-xxx-xxx---------------$$$$$$----------------------------------none-----------
NY----------xxx-xxx-xxx---------------$$$$$$---------------------------------$$$$-----------


Now my question is, my employer is reporting income on line 16 for New Jersey and on 17 no taxes are deducted for NJ. Is this normal? I was thinking only place they should be reporting my income is under NY.

Please guide.

Thanks,
SV

Yes, that IS normal that income is reported for both states but no taxes are withheld for NJ.

Because you work in NY, you must pay NY income taxes and you should have NY taxes withheld. Thus, you must file a NY state tax return.

SInce you LIVE in NJ, you must also file a NJ tax return. However, NJ will give you a credit for the taxes you paid to NY on your NY-based income. Since NY tax rates are higher than NJ, the credit completely offsets the NJ taxes, so there is NO NEED to withhold NJ taxes. In fact, you will probably get a small refund for the renter's rebate that NJ offers.