[hunterstudent]

Hello. I live in NYC and worked in NYC. My employer was based in NJ and accidentally took out NJ taxes for my first one or two paychecks. After that they started taking out NY state taxes, but failed to take out NY local taxes. Bottom line, what do I need to do? I think I need to file a NJ Non-resident 1040NR - is this correct? How will this appear on my W-2 -- will the total state taxes be noted or will it be delineated between the NJ and NY taxes that were taken out? Any help that anyone can provide would be greatly appreciated. Thanks.

[MukatA]

Your employer should not withhold NJ taxes. See if they can refund you the taxes.

If you don't get refund from your employer, then you will file NJ return as nonresident and explain your situation and get refund from NJ.
You will also file NYC income and report your total wages and pay the taxes.

If during the first one or two paychecks, you were in NJ, then you will report only this income on the NJ tax return as nonresident.
You will report entire income on NYC tax return and claim credit for taxes paid to NJ.

[hunterstudent]

MukatA - Thank you. The employer mistakenly took out NJ taxes - because they are based in NJ and most of their employees live in NJ. I lived and worked in NYC the entire time I worked for them -- despite their mistake they will not refund me. The only recourse they gave me is that they would pay for my extra state preparation. But honestly, I don't even want to speak to them anymore -- part of the reason I no longer work for them. More than anything I am just worried about how it will appear on my W-2 and how the individual states will handle it because it is such a goofy circumstance. Having said that, it sounds like I will need to file in NJ first and then NY. Thanks.

[ebaines]

Assuming that your employer can't (or won't) reverse out the NJ taxes withheld, your W-2 will clearly state how much was paid to NJ and how much to NY State. You should do the NJ non-resident return first (which should come out with you having a $0 tax bill and getting all your withheld money back), followed by NY State. On the NY State form is also the calculation for NY City tax. Be prepared to potentially have to come up with a fair amount of money to pay NYC, and depending on how much has been withheld for NY State, you may owe them some to make up for the period when your employer failed to withhold for them. Hope this makes sense.

[AtlantaTaxExpert]

BOTTOM LINE: File the NY/NYC and NJ tax returns.

You will get ALL of the NJ withheld taxes back (because has NO LEGAL STANDING to tax your salary), then you will turn around and pay that refund to NYC and then some.