NJ residents who work in NY - tax question

For those who live in NJ but work in NYC, for your annual state taxes, do you typically get a NY refund, than owe NJ a slightly higher amount?

At the start of summer, I transferred from my companies NJ office to the NYC office. I live in NJ. If I entered everything correctly, it looks like NY will refund me $140, and I owe NJ $240

That is our experience also.

Same here. If you're doing your taxes yourself, there is a glitch in the software that adds the two states' salaries when calculating state taxes. Be sure you're not paying NY or NJ tax on something like twice your AGI.

If there's a way to avoid this problem, please let me know! Despite recalculating my W4 each year, I wind up with a substantial NYS and a ridiculous US refund, and owe NJ a small amount.

State Return
New York
Income $43,407
Adjusted gross income (AGI): $30,321
Deductions $7,800
Taxable income: $35,607
Tax withheld or paid already $1,517
Credits $0
Actual tax due $1,375
Refund:$142

State Return
New Jersey
Income $43,424
Adjusted gross income (AGI): $43,424
Deductions $0
Taxable income: $42,424
Tax withheld or paid already $246
Credits $238
Actual tax due $719
You Owe: $235

j_r said:

Same here. If you're doing your taxes yourself, there is a glitch in the software that adds the two states' salaries when calculating state taxes. Be sure you're not paying NY or NJ tax on something like twice your AGI.

If there's a way to avoid this problem, please let me know! Despite recalculating my W4 each year, I wind up with a substantial NYS and a ridiculous US refund, and owe NJ a small amount.



Re: glitch in the software. Is this a TurboTax issue? Or another program? Thx -


It (TurboTax) has a place to check a box or something like that to avoid the double counting. If you don't have a NJ W2 and are just pulling the data from a NY W2, be sure to read the instructions very carefully re adding back for items that don't get the same tax treatment in the different states. I don't remember the details at the moment, but I believe you need adjustments (at least in some cases) for medical premiums and/or transportation benefits. I know we've messed this up a few times on our return. I have to re-study it every year. It is addressed in the explanatory verbiage in Turbotax, but still confusing.

I sure wish NJ taxation was more aligned with the federal as NY is. I don't mean the same rates, just the same 'structure' if you will. It sure would make things easier.

Yes, from the very beginning of the NJ tax where I owed them $2. This year it's $63. I'll be interested to see what it will be for 2015 when I haven't worked in NY.

NJ doesn't recognize my pre-tax retirement fund so they tax me on that income as well. I ALWAYS owe NJ...

It's almost always like this. NYS has a slightly higher tax rate than NJ does, but you owe NJ for any non-work-related income and for the "online sales tax" computation. NYS always wants to over-withhold so you get a refund- we now add an exemption to flatten this out.

Be sure to file for Dependent Care credits on your NYS taxes if you pay these (as most families with kids do).

Also be careful in that NJ does not permit net capital losses, only gains.

the_18th_letter said:

NJ doesn't recognize my pre-tax retirement fund so they tax me on that income as well. I ALWAYS owe NJ...


This is a heinous rule that also affects us (my wife teaches in NYS). If she were a cop in NJ she would be exempt for the exact same plan. Those of us who spend half our waking hours out-of-state pay higher taxes here than those who don't.

I think that NJ does allow deductions for 401(k) contributions, but not 529 contributions.

Steve said:

I think that NJ does allow deductions for 401(k) contributions, but not 529 contributions.

401(k) yes, but not 403(b) or a 457 plan.

FFB said:

Those of us who spend half our waking hours out-of-state pay higher taxes here than those who don't.


But the salaries in NY are higher for the same jobs/work (in my case, I would have had to take a $30K drop in salary). When I was working I could not afford to live in Maplewood (or many other places) if I was working in NJ. The excuse of taxes, commutation, etc. didn't wash. And I don't live high on the hog, believe me. I often wondered how people who worked in NJ could afford to live here, at least in this area of the state.

Meant 457, not 529. Duh, I switched my contributions from my 457 to a 401 for this very reason.

mums-

we pay higher rates on the same income. we can no longer deduct train passes. and, the salaries aren't really higher for the same jobs, there are just more jobs (in teaching). anyway, back to the thread ...

spontaneous said:

Steve said:

I think that NJ does allow deductions for 401(k) contributions, but not 529 contributions.

401(k) yes, but not 403(b) or a 457 plan.
Any idea why? They are really the same thing, just for different types of employers.


The offset for NJ citizens working in NY on the state's 1040 form is "credit for taxes paid to other jurisdictions". You can include as many as needed.


I have been using Turbo Tax since 1993 and have had no major issues as a NJ citizen working in NY, and recommend using it (Fed + NY + NJ programs) to simplify the filing process.


And yes, I typically get a NY refund, while owing NJ some taxes...mainly because my NY employer takes out NY taxes via payroll, while none come out for NJ. If I want to reduce/avoid paying NJ tax then I have to make an estimate of taxes owed, and send it to Trenton. But the amount is fairly inconsequential and in all the years I've filed I have never had to pay an underpayment penalty to NJ.


Mine is always the other way around -- NJ refund (~$600 this year) and owe in NY (~$300 this year). Wife works in NY, earns about half what I do; I work in NJ. It's a really weird system. And the H&R Block Tax Cut software I use always tries to do the weird double-taxation thing, too -- maybe I'll give TurboTax another try next year. 



gerryl said:

That is our experience also.

 +1



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