Double Tax? Living in NY & Working in Jersey? (Middlesex: taxes, zoned)
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Are you sure about this? I live in NY and work in NJ I get taxed as follows
NY Fed. $344.83
NJ $89.70
NY State $108.26
If this shouldn't happen do you know who i should contact? My HR says is correct. any ideas?
This looks reasonable given the fact that you LIVE in NY and WORK in NJ.
New Jersey is your NON-RESIDENT state. NJ taxes you on only the percentage of your income that you earn in New Jersey. Your employer takes NJ withholding from your pay to cover the estimated amount.
New York is your RESIDENT state. NY taxes you on all of your income regardless of where you've earn it. However, your resident state permits you to take a tax credit for "income taxes paid to other jurisdictions" -- specifically in your case, the tax you pay to New Jersey.
NY income tax rates tend to be higher than NJ rates, so your NJ employer also takes out NY withholding for the estimated difference between the lower NJ income tax and the higher NY tax. Accordingly, you're not really paying any "more" by working in NJ and living in NY than you would if you both lived and worked in NY.
Assume for one moment that both your job and home are in New York. Your NY withholding would then be $197.96 -- the amounts currently withheld for NJ and NY combined. But since you work in New Jersey, NJ wants it's share -- $89.70. Accordingly, NY gives you a credit (reduction) against the amount you owe them for a like amount, so only $108.26 is withheld from your pay.
(The reverse is not true for those who work in NY and live in NJ. They pay more in total than they would if they both lived and worked in NJ since they're charged NY's higher rates on their NY earnings.)
I hope this helps. Show this to HR and see what they say.
OP is talking of doing the OPPOSITE of what everyone is referring to--the previous posts referred to living in NJ and working in NY, and OP was referring to living in NY and working in NJ.
True, if you live in NJ (or anywhere) and work in NYC, you have to pay NYC city tax--everyone who works in NYC will pay it, regardless of where they live. (Of course you will also pay it if you live in NYC too.)
If you live in NYC and work in NJ, you should only have to pay NY state and NYC tax. If both NJ and NY tax are withheld you will get a credit for NJ tax withheld on your NY state tax at the end of the year.
This is 100% wrong.
If you do not live in NYC you DO NOT pay NYC tax. My wife and I moved to NJ last year and as soon as it was done we didnt have NYC tax taken out of her checks.
If you live in NY and work in NJ you get hit twice for both state taxes, if you live in NJ and work in NYC you pay NY state tax, no city tax and NJ credits all or most of your tax back. She did this a long time ago and it killed us in taxes because the employer didnt withhold NJ tax and we wound up having to cut a big check to NJ.
My wife has done both and know this all for a fact.
edit: her job in NYC offered to withhold NJ tax after the move but we chose not to and ended up owing nothing to NJ. If we had said yes we wouldve gotten all of it back from NJ.
If you live in NY and work in NJ you would be required to file a NJ Non-resident tax return. NJ would tax your wages earned in NJ but no other income such as interest and dividends. You would also file a NY state resident return. On this return you would be taxed on all of your income but receive a credit for the tax you paid to NJ. Not how much was withheld but the actual amount of tax due.
This looks reasonable given the fact that you LIVE in NY and WORK in NJ.
New Jersey is your NON-RESIDENT state. NJ taxes you on only the percentage of your income that you earn in New Jersey. Your employer takes NJ withholding from your pay to cover the estimated amount.
New York is your RESIDENT state. NY taxes you on all of your income regardless of where you've earn it. However, your resident state permits you to take a tax credit for "income taxes paid to other jurisdictions" -- specifically in your case, the tax you pay to New Jersey.
NY income tax rates tend to be higher than NJ rates, so your NJ employer also takes out NY withholding for the estimated difference between the lower NJ income tax and the higher NY tax. Accordingly, you're not really paying any "more" by working in NJ and living in NY than you would if you both lived and worked in NY.
Assume for one moment that both your job and home are in New York. Your NY withholding would then be $197.96 -- the amounts currently withheld for NJ and NY combined. But since you work in New Jersey, NJ wants it's share -- $89.70. Accordingly, NY gives you a credit (reduction) against the amount you owe them for a like amount, so only $108.26 is withheld from your pay.
(The reverse is not true for those who work in NY and live in NJ. They pay more in total than they would if they both lived and worked in NJ since they're charged NY's higher rates on their NY earnings.)
I hope this helps. Show this to HR and see what they say.
I'll pipe up. We are moving to NJ and working in NYC and have had in confirmed by our tax consultants, KPMG, that we will not pay NYC City Tax. We will be paying NY STATE income tax, which will work as a credit to NJ taxes, so it's almost a push, give or take a few dollars.
With regard to the OP, if you live any one of the 5 boroughs of NYC, you will pay the NYC city tax, which is substantial.
Oh! what a coincedence I work for KPMG, that's what we tell our partners when we prepare their taxes, that they will get reimbursed in their NJ taxes.
I live in NYC and worked in NJ last year. My employer only took out NJ tax. Im finishing up my NY tax return and owe NY money. Does anyone know if I have to pay a penalty as well since I didnt pay NY tax during the year I was working in NJ?
I live in NYC and worked in NJ last year. My employer only took out NJ tax. Im finishing up my NY tax return and owe NY money. Does anyone know if I have to pay a penalty as well since I didnt pay NY tax during the year I was working in NJ?
If you mean you worked in NJ during 2010 and employer only took out NJ tax during 2010. Far as I know there is no 'penalty' you just pay NY and NYC tax as you file your income for 2010.
If you meant something else like you worked in NJ in 2009 and didn't pay NY/NYC tax and it's 2011...I don't know.
I live in NYC and worked in NJ last year. My employer only took out NJ tax. Im finishing up my NY tax return and owe NY money. Does anyone know if I have to pay a penalty as well since I didnt pay NY tax during the year I was working in NJ?
Use New York Form IT-2105.9 to determine if a penalty is due:
OP is talking of doing the OPPOSITE of what everyone is referring to--the previous posts referred to living in NJ and working in NY, and OP was referring to living in NY and working in NJ.
True, if you live in NJ (or anywhere) and work in NYC, you have to pay NYC city tax--everyone who works in NYC will pay it, regardless of where they live. (Of course you will also pay it if you live in NYC too.)
If you live in NYC and work in NJ, you should only have to pay NY state and NYC tax. If both NJ and NY tax are withheld you will get a credit for NJ tax withheld on your NY state tax at the end of the year.
Wrong. Only NYC resident pay NYC income tax.
If you live in NYC and works in NJ, then you will pay NJ tax, which in term give you a credit to pay NYS and NYC tax.
I know one of my teachers from high school (who lived in northern NJ) worked in NY (I believe the city) while still living in NJ and was double taxed.
i lived in NJ and worked in NY. you file two returns, one for each state. you get back much of what you pay to NY, and owe NJ usually. I assume the reverse is true if you live in NY and work in NJ.
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New York Form IT-2105.9
