How to file taxes while residing in VA but working in NJ (apartment, credit)

[Potentialysane2011]

My husband and I reside and own a home in Virginia but my husband still works in NJ. I am retired on SSD here in VA. When we file our taxes do with pay taxes for both states on just One?

[snuffy1968]

Need to look at NJ rules for residency...it is possble he might be considered a residend in NJ. Does he commute back to VA on weekends? Where registered to vote, ties to community?

My gut would be that you will file as VA residents and husband will file Married filing separate (if makes tax sense) as a NonResident with NJ source income. Then on VA return you will get a credit for NJ taxes paid. Is husband a W-2 employee? I would expect employer is withholding NJ taxes?

[NC211]

You need to ask an accountant this question instead of an internet forum, thats my advice. You know, that whole (only two things guaranteed in this life - death and taxes) thing...

[CAVA1990]

Originally Posted by NC211

You need to ask an accountant this question instead of an internet forum, thats my advice. You know, that whole (only two things guaranteed in this life - death and taxes) thing...

How would this be any different from the huge number of people who commute to work in DC everyday or work virtually for a company located out of state? I work from home for a company on the West Coast but only pay VA tax. You pay state income tax where you live. Some cities though have a separate wage tax.

[slim04]

Originally Posted by NC211

You need to ask an accountant this question instead of an internet forum, thats my advice. You know, that whole (only two things guaranteed in this life - death and taxes) thing...

I agree, this is kind of complicated because you might have dual residency issues. There are things like whether NJ and VA has a reciprocity agreement and whether your husband has NJ residency (i.e. is he working remotely? Or does he have an apartment or hotel in NJ).

A CPA will go through the residency tests and then run the scenerios one which is the best way to file to limit your tax exposure. Definitely not something you want to trust H&R Block with.

[Fundman]

You pay state income tax where the income was EARNED. You will file returns in both states and your home state will credit you for the income paid to the state where it was actually earned. Residents of Virginia, Maryland, and DC paying taxes in their residency state is unique. Federal legislation was enacted to allow this because most of the people who work in DC live in Maryland and Virginia so the states didn't want to give up the revenue. If it wasn't for that law all the people who commute into DC would be paying DC income taxes. New York is notorious for hounding out of state residents for income allegedly earned in New York City.

[slim04]

Originally Posted by Fundman

You pay state income tax where the income was EARNED. You will file returns in both states and your home state will credit you for the income paid to the state where it was actually earned. Residents of Virginia, Maryland, and DC paying taxes in their residency state is unique. Federal legislation was enacted to allow this because most of the people who work in DC live in Maryland and Virginia so the states didn't want to give up the revenue. If it wasn't for that law all the people who commute into DC would be paying DC income taxes. New York is notorious for hounding out of state residents for income allegedly earned in New York City.

It's both and depends on the state. If you live in Georgia and work in Florida (no FL state income tax exists), you get taxed on your Florida income at Georgia rates.

If you live in Florida and work in Georgia, you get taxed in Georgia as a non-resident.

If you live in Georgia, but work in South Carolina, you pay Georgia income tax but get to credit your South Carolina taxes paid from your withholding or your SC non-resident tax return.

I thought the MD, VA, and DC tax situation was also unique and was part of the deal to get home rule back in DC.

[Middlin]

Fundman is correct. Tax is withheld based on where it is earned. If the state does have a reciprocal agreement, you can just pay the resident tax. If you're curious, here is the list of states with reciprocity. Depending on how much time the person spends in NJ and other factors, would determine if they would receive a full credit on NJ state income taxes.

State Reciprocal Tax Agreements | Payroll-Taxes.com

[michgc]

Some states have reciprocity agreements and some do not. New Jersey does not have reciprocity VA. Last year, we were residents of Virginia but my husband worked in North Carolina for a few weeks. We didn't move to NC until January 2012. North Carolina and Virginia do not have reciprocity. So he paid taxes to North Carolina for those few weeks. When filling out our tax return, we had to mail a copy of our NC tax return to Virginia, since we were still residents of Virginia. *I think that's what we did.* Actually, I don't want to think about it, I remember it being quite the nightmare.

You do have to determine where you are residents. There was a definition in the IRS publication, I believe.

ETA: This is what I remember. I am not an accountant or an attorney.

[starletta8]

My advice, first and foremost, is to check with an accountant! Virginia's tax system, especially with regards to personal property taxes in lieu of local (school) tax complicates things tremendously. You'll be filing both VA and NJ returns in addition to married but filing separately for federal taxes for certain.

However, without knowing property status/voter registration/any number of variables- the best advice that you can get is to consult with a tax professional! Even a CPA (which I am not) won't dish out advice online without understanding the whole picture- which you shouldn't disclose online for your own protection.

On a side note, NJ and NY have reciprocity agreements (I used to work in NJ). So the VA-MD-DC scenario is the same as NJ-NYC-CT (IIRC on CT). It's easier for all jurisdictions involved on many levels.

Good luck! And don't listen to message board advice other than to seek out a qualified professional.