Income Tax for NJ residents working in NY (fit in, credit)

[SAgosto]

I am not sure if I should post this in NY or NJ. I currently live in Westchester County and we are debating a house purchase in NJ. Does anyone know the tax implications for doing this? I assume the only consideration would be income tax?

[FrmlyBklyn]

Originally Posted by SAgosto

I am not sure if I should post this in NY or NJ. I currently live in Westchester County and we are debating a house purchase in NJ. Does anyone know the tax implications for doing this? I assume the only consideration would be income tax?

Is the question, you currently work in NY State and am contemplating moving to NJ, but continuing to work in NYC or NYS?

[re_alvz]

Yes. I moved from the Bronx to NJ mid year. I paid NY+NYC taxes from 1/1-7/31 and NY taxes from 8/1-12/31 and NJ refunded NY taxes from 8/1-12/31.

I am not a CPA but I am pretty sure the only that got affected was income tax.

[SAgosto]

Originally Posted by FrmlyBklyn

Is the question, you currently work in NY State and am contemplating moving to NJ, but continuing to work in NYC or NYS?

Yes.

Originally Posted by re_alvz

Yes. I moved from the Bronx to NJ mid year. I paid NY+NYC taxes from 1/1-7/31 and NY taxes from 8/1-12/31 and NJ refunded NY taxes from 8/1-12/31.

I am not a CPA but I am pretty sure the only that got affected was income tax.

This is what I assumed but curious if I will end up paying more. For me, why bother to move to northern NJ if I get hit with more taxes when I can just move to Rockland a few miles north.

[re_alvz]

Obviously not a CPA and I am pretty bad at Taxes, but AFAIK you actually save some money moving to NJ (from Tax perspective).

Plus Rockland taxes are insane and the corruption is bound to take them even higher.

Not to mention the commute will be a PITA.

[Goldendoodle1969]

You'll pay less income tax by moving to NJ, however you might lose any benefit in additional property tax depending on where you settle down.

As an example, using only standard deductions in both states...

New York State Income Tax on $200K(joint) would be $12,899

New Jersey State Income Tax on $200K(joint) would be $8,698

[Mightyqueen801]

Originally Posted by tdstyles

You'll pay less income tax by moving to NJ, however you might lose any benefit in additional property tax depending on where you settle down.

As an example, using only standard deductions in both states...

New York State Income Tax on $200K(joint) would be $12,899

New Jersey State Income Tax on $200K(joint) would be $8,698

But if he's still working in New York, he'll be paying New York State income tax.

[Goldendoodle1969]

Originally Posted by Mightyqueen801

But if he's still working in New York, he'll be paying New York State income tax.

Ahhh yes, you are correct, as usual. The point is moot since you still work in NY. The taxes you pay in NYS will be credited to your NJ return, essentially zeroing it out( so you won't owe anything more).

The question usually arises from the point that I made earlier. Since the NJ tax rate on income is lower than NY, can I get a refund since my income tax should have been lower? The answer is no. NJ will not be sending you a check for your NY payment.

NJ Division of Taxation - Income Tax - Credit for Taxes Paid to Other Jurisdictions

"New Jersey requires you to pay tax on all of your income, regardless of where it's earned. The credit reduces your New Jersey income tax liability so that you don't pay taxes twice on the same income; it is not a refund of the taxes you paid to another state or city. Your credit may never exceed the amount you would have paid if you had earned the income in New Jersey."


So short story long, your state income tax liability will not change regardless of if you stay in NY or move to NJ. I am not an accountant, just a good critical thinker Please check with a CPA but I'm 99.9% sure I'm correct.

[Phoenix2012]

Your absolutley correct, but i have a better scenario what if that inidvidual was residing in New Jersey and never paid any state taxes to NJ not one single year. They pay all of their taxes to NY, they have recieved child tax credits from NY and received alll of their refunds from NY. Without once filing in NJ for one single year during their entire residence in NJ. Will the person suffer from repercussions from these actions or will they be free and clear. Mind you this inidvidual is already in tax debt with the IRS for 15,000 dollars

[Goldendoodle1969]

Originally Posted by Phoenix2012

Your absolutley correct, but i have a better scenario what if that inidvidual was residing in New Jersey and never paid any state taxes to NJ not one single year. They pay all of their taxes to NY, they have recieved child tax credits from NY and received alll of their refunds from NY. Without once filing in NJ for one single year during their entire residence in NJ. Will the person suffer from repercussions from these actions or will they be free and clear. Mind you this inidvidual is already in tax debt with the IRS for 15,000 dollars

Since the tax rate in NY is higher, I would assume they'd be free and clear since they would have already paid more than they would have in NJ. They still have to file!