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I worked as a contractor in NJ starting Feb 17. Before this I was living in PA, not paying rent and using my parents address (PA) for all my official documents. My contract was supposed to end Aug 17 so didn't bother changing my license or car registration but I did rent an apartment in NJ near my work. The company that paid my paychecks remove state taxes for NJ from my paychecks. My contract ended up being extended until the end of Dec 17 but has now ended. Currently I'm still renting in NJ and will continue to do so until I find a new job (perhaps in NJ, perhaps elsewhere).

Question: It seems easiest to file my taxes in NJ since that is where I lived and that is who I already paid but will it be a problem from a tax perspective that my license/registration are still under PA?

  • Did you earn income while living in PA the first month and a half of 2017? – Hart CO Jan 14 '18 at 4:08
  • worst case, you owe taxes in both states, so make sure to clean up where you really live.There are many states that have agreements about single-taxing, but not all do. – Aganju Jan 14 '18 at 18:44
  • @HartCO The only earnings were in NJ – user3281667 Jan 15 '18 at 4:32
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You have two issues that have to be resolved when when tax issues involve two states:

  • where did you have residency while you earned that money.
  • where did you work when you earned that money.

Once that has been established then you determine where you have to pay taxes. Generally it is where you did the work. But if there is reciprocity between the states then they may have agreed that you pay taxes based on where you were living. Check both states tax authority website for information.

When determining residency the states will care about where your mail was sent, where you are registered to vote, where you registered your car, where you went when the contract ended.

You have to determine if you did enough enough that New Jersey will claim you lived there. Otherwise PA might have a claim on your income taxes.

When you determine your correct state of residency you might run into another issue: NJ may penalize you if you should have registered the car or gotten a drivers license because you lived long enough in the state. That information will be a separate issue on the NJ Motor Vehicle Commission website. There may be taxes, and penalties associated if you missed deadlines. There may also be insurance requirements.

Where the company withheld the taxes may not be a determining factor. They may have withheld NJ taxes because you told them to. In that case they were not responsible for determining the correct jurisdiction.

Of course even if it was a simple mater of clean breaks when moving from state X to state Y, you may have had too much money withheld in one state vs another especially if you had income while living in PA and then moved to NJ.

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