Dual State Income Tax Issue

[biznas]

What is the name of your state?NJ
I am resident of New Jersey state and working for an New York based employer. My employer said that both NY and NJ's state income tax will be withhold from my pay. Is it Legal?
My friend has same situation but his employer is only deducting NJ state income tax.

Waiting for reposne!

 

[pattytx]

Depends on whether you are physically working in NY or not. If you also work in NJ, you should be having NJ taxes only withheld; it would be irrelevant that the employer is HQ in NY.

If you work in NY, you are subject to NY withholding taxes. The only time NJ withholding would come into play is if the calculation of NJ taxes is higher than the NY amount; then the difference (only) should be withheld as NJ.

 

[biznas]

Hi,
Thanks for making it clear to me, i be thankful if you explain further!
I worked physically in NY, but lives in NJ. As per my knowledge NY tax rate is more than NY. So only NY state tax must be withheld..ok?
Second, by the end of year to which state i should file my tax returns?

I appreciate you time!

 

[pattytx]

That's correct. You will have to file a non-resident individual income tax return in NY. Hopefully, you will get some money back, because you will also have to file a resident return in New Jersey. New York is one of the strictest states in the country regarding the taxation of nonresidents who work in the state.

Sorry.