Work remotely file 2 states

Forum|Forum|1 year ago
January 17, 2025
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I just started a job for working remotely for a company in NJ. I live in MA. They just told me I’ll be paying state taxes to NJ and then I’ll have to file a state return in both states. I’ve read that I’d get a credit for all the taxes paid to NJ. How does MA get that money and will I end up paying taxes to both states?

TomD8

Employee

If you never physically work within New Jersey, then your income is not taxed by New Jersey. It is taxed only by your resident state of Massachusetts.

"With regard to nonresident telecommuters working from home for a New Jersey employer to perform work or services, only the telecommuting employee’s home state taxes the income."

https://www.nj.gov/treasury/taxation/conveniencerulefaq.shtml

But if you sometimes work within NJ, then that portion of your income would be taxable by NJ. In that situation, MA would give you an "other state credit" for the taxes paid to NJ. The credit prevents double taxation, which is prohibited by a U.S. Supreme Court ruling.

If your employer does not withhold MA income tax from your pay, then you must make quarterly estimated tax payments to MA. See this:

https://www.mass.gov/info-details/massachusetts-dor-estimated-tax-payments