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I lived in New York the entire year and worked in my New York City office the first half of the year. After that my offices were moved to New Jersey and I worked remotely from my home in NYC 80% of the time, the remainder of the time I worked from the offices in New Jersey.

My employer withheld NY taxes for the entire year (no NJ state taxes were withheld). Furthermore, my W2 lists my office address as the old New York City office address.

My questions are,

  1. Do I need to file an NJ non-resident tax return?

  2. Could I possibly save some money in both state and local (NYC) taxes by filing an NJ non-resident tax return for the half-year 20% of the time I worked in NJ?

  3. How do I make sure I don't get double taxed?

Thanks

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  1. Do I need to file an NJ non-resident tax return?

Probably. You were receiving income from a NJ employer. Though if it is W2 employment, they should have already removed NJ tax on your Paycheck. However 20% of half a year is only about 13 days - less than three weeks. If they didn't report any income to NJ, then you may not need to file an NJ return. To be on the safe side, if I were you, I would file a NJ non-resident return anyway.

  1. Could I possibly save some money in both state and local (NYC) taxes by filing an NJ non-resident tax return for the half-year 20% of the time I worked in NJ?

No. The way it works is you owe New York taxes on your entire income, but you get a credit for any tax paid to NJ. Whichever way it is done, it simply works out as the whichever state is higher.

  1. How do I make sure I don't get double taxed?

As long as the returns are filled in correctly, you shouldn't be.

  • ". Though if it is W2 employment, they should have already removed NJ tax on your Paycheck. " only if you filed a W-4 for NJ and you had some way of telling them that these hours were worked in NJ and those in NY. I had one employer who did this. You had to specify the zip code where the work was done on each line of the time card. – mhoran_psprep Apr 5 '18 at 11:04
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This is one of the cases where using tax software will help. You'd need to buy the 2nd state, as the typical SW has one state free. From there, the SW will ask where you spent your time, and fill out the forms correctly.

Tax paid to one state get's credited for the other. As NY is higher anyway, NJ will not raise your tax, but take a cut away from NY. I believe the term is they "get a taste" of NY's piece of your action.

  • but presuming I don't purchase this software, what you're saying is I do need to fill out an NJ nonresident form for the small amount of time I worked in that state, and then take the corresponding credit on my NY form. – Thoth Apr 4 '18 at 16:36
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    Yes, you got it. – JoeTaxpayer Apr 4 '18 at 16:37

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