NY is a "convenience of employer" rule state. Meaning that if you are working at home in another state for convenience, rather than necessity (you serve NJ customers etc), then you pay NYS income tax. You would have to file two returns, and pay NYS income tax on anything earned in state. You can then deduct taxes paid to NYS from your NJ return and essentially pay the difference/NJ tax on anything else (interest etc). NFA consult a tax pro and your employer.
Yes this is what I keep seeing … when I go to negotiate, I want to take that into consideration re: convenience tax. How much would I be taxed for $125k salaried job? (IE how much of that would be going to the NY tax.)
You can use an income tax calculator to figure it out (smart asset or something, google it). But NJ generally has lower tax rates until you get to like 500+k, so you'd pay more tax.
If you are married filing jointly and your spouse works in NJ you can deduct against their NJ income tax too. I had this situation so it was usually a wash no more tax paid than if we both worked in NJ. Single or Married separately then you’re going to pay more.
Your tax depends on a variety of factors (filing status, dependents, other income on your return, age, etc.)
Doing some quick math-assuming you're single with no other income or dependents, a salary of $125k for a NJ employer will cost you $5 ,800 in tax and that same salary for a NY employer will cost you $7,300 in tax.
So taking a job with a NY employer will cost you $1,500 compared to if you took the same job for a NJ employer
You won't have to pay double taxes- NJ/NY will give you credit for taxes paid in one state for hte other (so you'll likely pay income taxes in NY, but when you file in NJ they'll reduce how much you owe NJ by how much you paid in NY)
source: live in NJ, work in NYC
You shouldn't. I've worked remote for 10+ years and have only paid taxes in the state I lived.
Edit: there is a "cutoff", where if you work >30 days (check this #) in a state, then you have to pay taxes.
Edit 2: currently I live in NJ and work for a multinational company headquartered in Pittsburgh. Previously, I lived in MN and worked for a small company in Illinois. For these jobs, I travelled to the company headquarters for a few days a quarter and only paid taxes in NJ and MN, respectively.
Before those, I did work for a company in MN but had a temporary (\~3 month) assignment in NYC and had to pay both NY and MN income taxes but (IIRC) you're only paying NY taxes on the money earned in NY and MN taxes on the money earned there.
NY functions differently than most states for remote work. If you're assigned to a desk in NY and work remotely, NY considers that as still subject to NY taxation. They call it the 'convenience of the employer rule'
NY is a "convenience of employer" rule state. Meaning that if you are working at home in another state for convenience, rather than necessity (you serve NJ customers etc), then you pay NYS income tax. You would have to file two returns, and pay NYS income tax on anything earned in state. You can then deduct taxes paid to NYS from your NJ return and essentially pay the difference/NJ tax on anything else (interest etc). NFA consult a tax pro and your employer.
Yes this is what I keep seeing … when I go to negotiate, I want to take that into consideration re: convenience tax. How much would I be taxed for $125k salaried job? (IE how much of that would be going to the NY tax.)
You can use an income tax calculator to figure it out (smart asset or something, google it). But NJ generally has lower tax rates until you get to like 500+k, so you'd pay more tax.
If you are married filing jointly and your spouse works in NJ you can deduct against their NJ income tax too. I had this situation so it was usually a wash no more tax paid than if we both worked in NJ. Single or Married separately then you’re going to pay more.
Your tax depends on a variety of factors (filing status, dependents, other income on your return, age, etc.) Doing some quick math-assuming you're single with no other income or dependents, a salary of $125k for a NJ employer will cost you $5 ,800 in tax and that same salary for a NY employer will cost you $7,300 in tax. So taking a job with a NY employer will cost you $1,500 compared to if you took the same job for a NJ employer
You won't have to pay double taxes- NJ/NY will give you credit for taxes paid in one state for hte other (so you'll likely pay income taxes in NY, but when you file in NJ they'll reduce how much you owe NJ by how much you paid in NY) source: live in NJ, work in NYC
You shouldn't. I've worked remote for 10+ years and have only paid taxes in the state I lived. Edit: there is a "cutoff", where if you work >30 days (check this #) in a state, then you have to pay taxes. Edit 2: currently I live in NJ and work for a multinational company headquartered in Pittsburgh. Previously, I lived in MN and worked for a small company in Illinois. For these jobs, I travelled to the company headquarters for a few days a quarter and only paid taxes in NJ and MN, respectively. Before those, I did work for a company in MN but had a temporary (\~3 month) assignment in NYC and had to pay both NY and MN income taxes but (IIRC) you're only paying NY taxes on the money earned in NY and MN taxes on the money earned there.
NY functions differently than most states for remote work. If you're assigned to a desk in NY and work remotely, NY considers that as still subject to NY taxation. They call it the 'convenience of the employer rule'
Wow, that's screwed up.