Question

NY / NJ State Income Tax Impact due to Remote Work with Covid

Forum|Forum|4 years ago
March 18, 2022
1 reply
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Employer is NYC/NY based, and permanent address is NJ based. For 2021, with remote work, my employer paid state income tax based on state of residence to NJ instead of to NY as state of employer. Instead of normal office in NYC, employer assigned office based in NJ. W2 shows full gross income in NY and NJ, with NY employer, with state income taxes paid to NJ for 2021, based on NJ withholding. Normally in past, completed NY state income tax return first, and then NJ income tax return gives credit for taxes paid to NY state. If NY taxes completed first for 2021, then NY income tax return shows huge state income tax bill due to NY, which then presumably NJ gives credit, and adjusts. Is there a different approach for 2021 state taxes, given remote work?

M

MAK70

If you were remote for all of 2021, you would not have to file a New York state tax return this year. If you worked in New York some of the time, you would have to allocate your income by the percentage of time worked in New York versus New Jersey.

S

SteveD57Author

Thanks MaryK. My employer paid a very small amount of state income tax to NY State. Commuted into office in NYC just one day during 2022, which was to clean out office since employer moving to offices to a different building in NYC. If need to allocate just one day to working in NYC, where in Turbo Tax do I allocate one day of income?

E

ErnieS0

Here's how to allocate New York wages:

Go to the New York section
On New York Income Allocation, say No to Were all of your wages and/or your self-employment income earned in New York State?
Edit Your W-2 on Your Form W-2 Summary
Choose Allocate by Number or Days or Allocate by Percentage on Allocate Wages to New York (percentage is usually the easier calculation)