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Old 05-20-2009, 03:39 PM
 
53 posts, read 195,897 times
Reputation: 25

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Hello! I have a question. I work in New York City, but live in New Jersey. Even though I told my employer that I live in New Jersey, they only withhold taxes for New York state (in other words, they withhold NO money for NJ state income taxes, but a LOT for NY state). They told me that it is a requirement of New York state law that they withhold the entire amount for New York state.

My question: Clearly, I will have to pay taxes to New Jersey at the end of the year. Will I end up getting stuck with a large tax bill from NJ, but a large refund from New York state? I suppose if the money is refunded at the end of the year, it's not a big deal, but it would still be bad to have to write the check out at the end of the year to New Jersey...

Any thoughts? How does it work?
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Old 05-20-2009, 03:41 PM
 
Location: Holmdel, NJ
17,606 posts, read 14,176,711 times
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new york state gets to keep the taxes not new jersey.
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Old 05-20-2009, 04:05 PM
 
53 posts, read 195,897 times
Reputation: 25
So it's accurate that New Jersey will not be expecting ANYTHING from me at the end of the year, if all my income is earned in New Jersey? That's surprising. I wonder how they ever got New York to agree to that...
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Old 05-20-2009, 04:08 PM
 
Location: Holmdel, NJ
17,606 posts, read 14,176,711 times
Reputation: 10115
Quote:
Originally Posted by MMan710 View Post
I find it hard to believe that I have to pay full New York state taxes, and that New Jersey will not take anything from me at all. I worked in New Jersey and lived in New York for a short period of time, and the taxes balanced one another out...
i am working in new york and living in nj. im trying to think of how it works but im sure that new york got the income tax not new jersey. im not sure how the difference in tax rates worked out.
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Old 05-20-2009, 05:24 PM
 
Location: Edison NJ
1,847 posts, read 4,286,205 times
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You fill out your fed return just as you always would.
You fill out a NY state return.
Then you fill out a NJ state return stating how much you paid to NY.
Hopefully at the end you dont still have to pay more.

We usually had to pay something like $200. Which in the grand scheme of things isnt horrible. Luckily our fed return was always more than that.

If you use TurboTax you have to pay for 2 electronic state returns.
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Old 05-20-2009, 05:29 PM
 
13 posts, read 31,687 times
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The taxes you owe to NJ will be small. It might just be on investment income and capital gains, but I can't swear that that's all it is. You may want to send in quarterlies to NJ just to cover yourself. Just do a quick run through of your 2009 taxes in NY and NJ (I know, how fun)and that will let you know whether you should send in quarterly payments and, if so, for how much.
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Old 05-20-2009, 05:30 PM
 
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Generally it works like this: you pay state income taxes from the source state of your income. In this case, your job is in NY, so the source of your income is NY state. You will pay NY state taxes, as a non-resident.

Whether your state of residence taxes you as well is up to that state. In this case, NJ does ding you for a relatively small amount of taxes, but they reduce your NJ income taxes by a substantial amount because of the "credit" they give you for paying NY state taxes. They never let you get away with paying ZERO NJ income taxes, but it will be a relatively small amount.

So when you do your income taxes, the general rule of thumb is: first do your tax returns for the state(s) where you earn your income. Then, based the taxes you paid to those states, you can complete your NJ income tax return and include the proper amounts to reflect taxes you paid to those other states.
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