[kingdubya]

I live in NJ and work in NY once a week, the rest of the week I work for the same job but in NJ, all my tax was withheld in NY wats my best option and what forms do I need

[MukatA]

You will file federal tax return form 1040 and then state tax returns for NY and NJ. On your NJ tax return, you will claim credit for the taxes paid in the NY. Since NY state tax rate is higher than NJ tax rate, you may not owe any NJ taxes (but you must file).

[AtlantaTaxExpert]

It is LIKELY you will need to file Form 1040, because your withheld NY and NJ state income taxes MAY exceed your $5,350 standard deduction.

If not, Form 1040EZ should be adequate.

As MukatA says, you must file a state tax returnfor BOTH NJ and NY.

When you file your NY return, you will need to file as a non-resident and pro-rate 20% of your salary as NY-sourced income. You will then be taxed on that 20% at NY state income tax rates.

Since 80% of your salary is NJ-sourced, I believe you will also pay NJ taxes (you pay on 100% of your salary), but you will get a credit for the NY taxes you paid that will reduce your NJ taxes somewhat. You will get a huge refund from NY, but then have to turn around and pay the bulk of that refund to NJ (since no NJ taxes were withheld). Expect to pay an under-withholding penalty to NJ.

If you need professional help to file your tax return, I have a number of clients in the NJ/NY area and can provide references. If you are interested, contact me at [email protected].

TODAY, go to your employer and fill out the needed paperwork to have NJ taxes withheld from your paycheck. That way, when you file next year, you can avoid that under-withholding penalty.

[MukatA]

AtlantaTaxExpert said that you pro-rate 20% of your salary as NY sourced income. With this arrangement the NY state must have some questions.

What proof kingdubya must attach with is tax return so show that only 1 day in a week is NY source income? The employer has withheld NY taxes on full 100% salary. The employer must amend the present W2 and issue a new W2 on the basis of 20% NY income. Will they agree?

[AtlantaTaxExpert]

It has been my experience that NY state WILL challenge a 20% pro-ration, so attaching a statement from your employer about how often you work in NY state would probably be a good idea.

There is no need for a new W-2, because the tax payments have already been sent. The memo from the employer should suffice.

[MukatA]

May be doing amended return won't be that difficult. Only the total wages amount for NY state return need to be changed. Taxes don't change. I have seen many amended W2s even filled in handwriting.

[AtlantaTaxExpert]

It is a real pain to amend W-2s, and the employer does not want to do it unless it can be shown to be really necessary.

However, Kingdubya can ask. All they can do is say NO!