Double Tax? Living in NY, working in Jersey (New York, Boston: rent, credit)

[comingsoon]

Can anyone shed some light on living in NY and working in NJ with regards to taxes? I hear that I will be double taxed, however I am finding no information online to substantiate this claim. I am already going to incur additional expenses in rent and tolls and this is the deciding factor of whether I forgo living in NY altogether. Please help!!!

Thanks in advance to everyone. I have had nothing but great responses to all of my posts about this move.

[Manhattan-ite]

Hello,

My wife and I live in Midtown Manhattan. She works right now here in Midtown, but next year her office will be moved to Jersey City (sucks or what). She'll be commuting across the Hudson, but believe me she'll pay no taxes in Jersey. Enough we have with the outrageously high taxes of New York!

Think of those millions of Jersey people who commute daily to Manhattan. Do they pay taxes in New York? No, other than what comes with the products they may buy here.

Sounds like a scary, unfounded rumor, that of double tax.

[antdaw]

You are wrong Manhattan-ite. Your wife will pay both NY and NJ state taxes. NY will, however, give her a credit for the taxes she pays in NJ.

[holden125]

NY taxes are higher than NJ. You have to pay NJ, because the income is actually earned there. Sorry, Manhattan-ite, you don't get any say in the matter. Happily, though, you only pay NY the difference between what you paid to NJ and the NYS/NYC resident tax level due to the credit NY gives for NJ taxes. So effectively, you pay the same income tax as if you work and live in NYC, which is higher than what you'd pay if you worked and lived in NJ. And the bulk of the taxes go to support NJ, not NY, but that makes little direct difference to you.

[Fred314X]

Originally Posted by antdaw

You are wrong Manhattan-ite. Your wife will pay both NY and NJ state taxes. NY will, however, give her a credit for the taxes she pays in NJ.

And it's the same thing on the other side of the river. If you live in New Jersey but work in New York, you pay a nonresident tax to New York. It's nice to think that you avoid some kind of taxation by living and working in different states...but at least in this corner of the country, how shall I put it, fuhgeddaboudit!

[clevedark]

It's the same thing around Boston--if you live in NH and work in MA you pay taxes in both places. Probably applies the other way around, too.

[holden125]

Originally Posted by clevedark

It's the same thing around Boston--if you live in NH and work in MA you pay taxes in both places. Probably applies the other way around, too.

It does work both ways but it gets interesting because NH has no state income tax. So if you work in MA and live in NH, or if you live in MA and work in NH, you pay the same tax as if you both worked and lived in MA. If you live and work in NH you pay no state income tax at all. But any town in NH with decent schools and services will have higher property taxes than comparable towns in MA. They like to pretend otherwise, but they have to raise revenue somehow.

[holden125]

Originally Posted by Fred314X

And it's the same thing on the other side of the river. If you live in New Jersey but work in New York, you pay a nonresident tax to New York. It's nice to think that you avoid some kind of taxation by living and working in different states...but at least in this corner of the country, how shall I put it, fuhgeddaboudit!

You can't avoid being taxed by the state you live and/or work in, but since 2002 or so you do avoid the NYC income tax if you work in NYC but live anywhere outside the five boros of NYC. Depending on how much you make, that can come out to several hundred a month. But if you actually buy property in the suburbs, your increased property tax bill will probably offset the savings and then some. Commuting costs go up too.

[clevedark]

Originally Posted by holden125

It does work both ways but it gets interesting because NH has no state income tax. So if you work in MA and live in NH, or if you live in MA and work in NH, you pay the same tax as if you both worked and lived in MA. If you live and work in NH you pay no state income tax at all. But any town in NH with decent schools and services will have higher property taxes than comparable towns in MA. They like to pretend otherwise, but they have to raise revenue somehow.

I always wondered about that! I am amazed at how high property taxes are in NH. I've heard that public schools can be abysmal there.

I posted in the first place because I was amazed to find that the same rule applied in the Boston area. I thought this "taxation without representation" was just another tough luck aspect of working in NYC.