Tax Law (Questions About Taxes)/NJ-NY income taxes


If I live in NY and work in NY (from my home over the internet) for a NJ based company am I required to file an NJ non resident return to claim income derived from a NJ co? How about if my employer only did NJ withholdings for me, do I file a zero return and claim it all back or do I pay NJ and get a credit on the NY return for tax paid to NJ?

Dear Chaim,

You have to file NY resident return and report income derived from NJ. NY residents pay tax based on NY income source (which is not the case) and also based on residency (this is your case).

You also file NJ non-resident return and reconcile tax withheld from your paycheck with your actual tax responsibility - which may be more or less than what what was withheld.

Then on your NY return you fill out a form for resident credit and offset tax paid to NJ against your NY tax liability. Credit may be not sufficient to cover NY tax in full - then you will have to pay a difference to NY.

This is not an exercise for self-prepared return. The risk of incorrect calculation of credit base on multiple state filing is too high. Unless the amount of tax paid to NJ is negligible.

I.J.Zemelman, EA

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IJ Zemelman, EA MBA


I am an IRS-authorized EA and principal of a Tax Preparation firm focusing on U.S. Expatriates. We specialize in all tax issues faced by American citizens living abroad - such as foreign earned income, tax treaties, foreign spouse, etc. Visit our website - - for more information.


18 years professional tax experience, 12 with expatriate taxes.

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