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shazzerg · Jan 24, 2008, 08:48 AM

I just started a new job working from home in NY (not NYC) full-time as a W2 employee of a company located in NJ. I received my first paycheck and noticed all the taxes taken out were for NJ. Do I need to have this corrected? I am terrified of having to pay a large amount of taxes so I want to make sure all the money that needs to come out is coming out now. What should I ask my employer to do? Clearly I am confused. Thanks.

George_1950 · Jan 24, 2008, 09:18 AM

Interesting twist, that you are working at home for an out-of-state (W2) employer. Why don't you call them and ask? Otherwise, it has been my experience that: NJ withholds income taxes, right? You will most likely file a non-resident return in NJ, and the customary return in NY, taking a credit for taxes paid in NJ for those owed in NY. If NY has higher income taxes, you may owe a penalty; NY will request you file quarterly estimated taxes in that event. At least, this is my experience in two other states.

shazzerg · Jan 24, 2008, 09:34 AM

They took out FICA, Fed Wt, NJ ST, and NJ UC (?).. .

This sounds complicated.. . I will probably need an accountant as opposed to how I usual file online?

Originally Posted by George_1950

Interesting twist, that you are working at home for an out-of-state (W2) employer. Why don't you call them and ask? Otherwise, it has been my experience that: NJ withholds income taxes, right? You will most likely file a non-resident return in NJ, and the customary return in NY, taking a credit for taxes paid in NJ for those owed in NY. If NY has higher income taxes, you may owe a penalty; NY will request you file quarterly estimated taxes in that event. At least, this is my experience in two other states.

George_1950 · Jan 24, 2008, 09:38 AM

FICA & Fed WT is 'universal' and doesn't matter which state; the NJ state tax is the one you are asking about, I believe, and you will receive a credit on tax owed to NY when you file your return; you will most likely file a non-resident return in NJ, is my point. "NJ UC" sounds like NJ Unemployemnt Compensation, but I am not certain. I think you should contact your manager or payroll office and go over these details.

AtlantaTaxExpert · Jan 24, 2008, 10:32 AM

You should be paying NY state taxes ONLY, because you live AND work in NY, NOT NJ.

Call your employer and have him refund the NJ taxes and start withholidng NY taxes. That will fix the problem.

George:

The ARK would have sunk as well if IT hit a iceberg.

shazzerg · Jan 24, 2008, 10:40 AM

Thank you both very much!

AtlantaTaxExpert · Jan 24, 2008, 10:49 AM

Glad to help!