Question

Started a new job in NY but live in NJ

Forum|Forum|2 years ago
February 27, 2024
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I recently took a different position with the same company working in NY but live in NJ and am finding it confusing allocating the number of days worked in NY. I started in September and my employer informed me to keep track of the days I worked in NY which came out to 39 (I am hybrid, typically 2-3 days in the office but it differs week by week). I am getting double taxed for NY and NJ and confused as to how this all works. I expected to get a refund back since i'm getting double taxed but maybe i was misinformed/ too hopeful.

I worked 240 days for the year, 82 days since September in NY and 39 days in the office. So would I put 158 days in outside of New York and then 43 days in worked outside of New York at home (82 days - 39 worked in office=43)? That doesn't sound right because next year if I work hybrid then I would be getting double taxed and all my work from home days would still count as days worked in NY meaning I get no tax break/credit.

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Vanessa A

Did you work outside of the state of NY and on the road or did you work from home for the other 43 days?

It is possible that NY will tax ALL of the income for the last 82 days of your work year due to the fact that NY has a Convenience of the Employer Rule. Basically, this rule says if you are working remotely for your convenience then you are considered to be working in NY. If you are working remotely for your employers convenience, then you would not be considered to have income from NY sources. Since your employer does have office space for you and does not require you to work from home, there is a good chance you do not meet the criteria to exclude the days working from home as NY sourced income.

If you DO meet the criteria to not be considered to have income from NY sources you would enter your NY income for the 39 days and your withholdings as however much was withheld for NY.

If you do NOT meet the criteria to be considered working remotely for the convenience of the employer, then ALL of your income would be taxable to NY. In this situation, you will file your NY return FIRST as a nonresident and include ALL the income earned in NY. This will all be taxed by NY. But you will then receive a credit on your NJ return for taxes paid to NY.

Depending on your income and situation, it may seem like double taxation as both states will tax the income, but then if your NJ tax rate is higher than your NY tax rate, then the credit for your NY taxes on your NJ return may leave you still having to pay more in taxes to NJ. Or the opposite could be the case, if your NJ rate is less than your NY rate, then the credit you receive will only cover the specific NY earned income and not give you a full credit that resulted in a refund.

NJ taxes paid to Other States

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A

akoray59Author

I am assuming I do not meet the criteria for working from home based on my employers convenience. Why would all of my income be taxable if this is the case though? Having worked only 82 days in NY why would I get taxed on all of my income?

I also tried filing as a nonresident first and received the tax credit for NJ but still ending up owing around $2,000 to NY which is what confused me. If i am getting double taxed why would I still owe money to NY especially if i only worked there since September?

DaveF1006

The convenience of the employer rule applies to certain taxpayers who work from home. It means you're taxed as if you work in your employer's state even if you don't, which is the case here. So it is possible that you owe a large amount to NYS because the entire amount of income earned on the job is taxed in NYS.

if you have other income such as dividends, interest or investment income, these need to be excluded from the NYS return. There are allocation screens in your NYTS return to exclude these items from NYS income.

NJ is a state that taxes all income no matter where it is earned. It does give you credit for taxes paid in NYS thus the tax consequence has a lesser impact than in NYS. You make think you are being double-taxed but in reality, you are not because you are receiving a tax credit for the taxes paid in NYS. You did mention you received the tax credit in your NJ return.

You prepared the return correctly. You prepare the NYS non-resident return first to receive the tax credit and then the NJ return.

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