Hi, I am a full-time NY Resident working for a company based in NJ. I'm a full-time remote worked out of NY since 2021. For the past few years I have only paid NY State tax, and only filed NY State taxes. Starting 9/9/2023 NJ started to collect NJ Sales Taxes based on the income made from this date onwards. The total tax amount between NY and NJ per pay statement didn't change much (NY basically cut cut in half), but I'm a bit at a loss here:Why did NJ suddenly start taxing me? Looks like this law is impacting me? [NJ} P.L.2023, c.125 was enacted on July 21, 2023 and establishes a “convenience of the employer test” (convenience rule) for nonresident income sourcing. See: https://www.nj.gov/treasury/taxation/conveniencerule.shtmlAs far as taxes are concerned from my research I believe I need to:Prepare Federal firstThen prepare NJ (I'm a NY Resident)NY lastDo I need to do anything else manually? I guess that NY will give me a credit for taxes paid to NJ to protect from dual taxation, or will it be the other way around? This is so confusing! Thank you.

@mhaanraadts wrote:As far as taxes are concerned from my research I believe I need to:Prepare Federal firstThen prepare NJ (I'm a NY Resident)NY last Assuming that you're working remotely for your own convenience, then Yes, that is exactly what you need to do.

TurboTax

File with experts
File your taxes
Experts at your fingertips

An expert helps with your taxes, or does them for you
TurboTax Expert Full Service

TurboTax Expert Assist

TurboTax Self-Employed
Prior year taxes
File myself
File myself
Do it yourself

We'll guide you step-by-step
TurboTax Do It Yourself

TurboTax Self-Employed

TurboTax Desktop
TurboTax Free

Activate your product

Prior year taxes
Business
Business
Business taxes

Get your T2 corporate return done right, your way
TurboTax Business

TurboTax Business Desktop
Tax situations
Tax situations
Tax situations

Find extra guidance for your big life moves
For investors

For 25 and younger

For self-employed

For new to Canada

For life changes
Resources
Resources
Resources

Explore tax tools, get tips, and read reviews
Personal income tax calculator

RRSP savings calculator

Learning hub

TurboTax support (FAQ)

TurboTax community
Pricing

Community

mhaanraadts

Solved

NY Resident, working remotely for a NJ Company. NJ Started taxing in September 2023

Forum|Forum|2 years ago
February 2, 2024
1 reply
0 views

Hi,

I am a full-time NY Resident working for a company based in NJ. I'm a full-time remote worked out of NY since 2021. For the past few years I have only paid NY State tax, and only filed NY State taxes.

Starting 9/9/2023 NJ started to collect NJ Sales Taxes based on the income made from this date onwards. The total tax amount between NY and NJ per pay statement didn't change much (NY basically cut cut in half), but I'm a bit at a loss here:

Why did NJ suddenly start taxing me? Looks like this law is impacting me? [NJ} P.L.2023, c.125 was enacted on July 21, 2023 and establishes a “convenience of the employer test” (convenience rule) for nonresident income sourcing. See: https://www.nj.gov/treasury/taxation/conveniencerule.shtml
As far as taxes are concerned from my research I believe I need to:
- Prepare Federal first
- Then prepare NJ (I'm a NY Resident)
- NY last

Do I need to do anything else manually? I guess that NY will give me a credit for taxes paid to NJ to protect from dual taxation, or will it be the other way around? This is so confusing!

Thank you.

TurboTax Home & Biz Windows

Best answer by TomD8

You claim the "other state credit" on your home state's tax return. In your case, NY will credit you for the taxes you pay to NJ on the dollars that are taxed by both states. This prevents double taxation, which federal law prohibits.

This is why it is key in TurboTax to complete the non-resident state tax return before the home state return. That sequence allows the program to correctly calculate and apply the credit.

TomD8

Employee

@mhaanraadts wrote:

As far as taxes are concerned from my research I believe I need to:

Prepare Federal first
Then prepare NJ (I'm a NY Resident)
NY last

Assuming that you're working remotely for your own convenience, then Yes, that is exactly what you need to do.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

mhaanraadtsAuthor

Yes, I am working remotely for my own convenience.

Do you happen to know which state will provide credits for taxes paid to the other state? Both NY and NJ have the convenience rule. This is very confusing. Thanks.

TomD8Answer

Employee

This is why it is key in TurboTax to complete the non-resident state tax return before the home state return. That sequence allows the program to correctly calculate and apply the credit.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.