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    lht3142's Avatar
    lht3142 Posts: 3, Reputation: 1
    New Member
     
    #1

    Nov 1, 2007, 11:38 PM
    Live in New Jersey Work in New York City
    I want to know if there are specific tax advantages if one were to live full-year in New Jersey and work in Manhattan versus the case where one were to live full-year in New York city and work in Manhattan.

    If I were to live full-year in New Jersey and work in Manhattan, will I have to pay New York city taxes? I went over form IT203 (Non-resident income tax return); it appears that I will have to pay New York state tax and Yonkers nonresident earnings tax, but there is no provision for New York city tax. Could this be a potential tax advantage over the case of living full-year in New York city and work in Manhattan? It is a decent saving.

    Furthermore, if I were to live full-year in New Jersey and work in Manhattan, will I be withheld taxes from New Jersey state, New York state, New York city, and Yonkers?

    I actually don't understand this Yonkers tax. What is it? Is it a defined boundary or region in New York city where one work? If I work in downtown Manhattan, am I part of Yonkers automatically?

    Thanks
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,834, Reputation: 846
    Senior Tax Expert
     
    #2

    Nov 2, 2007, 01:05 PM
    Absoultely, there are multiple tax advantages from LIVING in NJ while WORKING in NYC.

    First and foremost, if you live in NJ, you do NOT have to pay NY city income taxes, which are pretty hefty. That, by itself, MORE than pays for any commuting costs involved.

    Second, due to a credit given by NJ for the NY STATE income taxes paid, you will pay ZERO NJ taxes on your NY-based income. If that NY-based income is your only source of income, you will have to file a NJ return, but NO taxes will be due and you probably will get a small refund due to the renter's credit.

    Because no NJ taxes will be due, have NO New Jersey taxes withheld. Why give it to New Jersey when you will get it all back at the end of the year? Just keep it and use it yourself!

    BOTH the NY City and the Yonkers City Tax is embedded in the IT 201 and IT203 form. However, if you do not live in Yonkers or NYC, by law you are NOT obligated ot pay taxes to those cities.

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