Income Taxes - Live in NJ, Work in NY. Looking at working in NJ soon...
September 29, 2016 8:27 AM   Subscribe

I currently live in NJ, and Work in NY City. If I worked in NJ, what's the tax savings (if any)?

Hi everyone! I've determined that I need a change of employment, and, surprisingly, it's gone pretty well.
The issue I am facing is understanding how to compare the salaries. Specifically, the savings I will see from working in NJ vs in NYC (I live in NJ).
I can figure out the commuting costs, but I feel like there is a benefit with not having to pay NYC taxes that I can't quantify. Currently, I pay taxes in both states, and there is an offset so I'm not paying FULL taxes in both, but I do still end up paying a bit to NJ, and refunded a little from NY.
Is it just a matter of looking at what the NJ taxes were last year, and using that number, ignoring the NY taxes?

Thanks,
posted by niteHawk to Work & Money (5 answers total) 1 user marked this as a favorite
 
You'll avoid paying NYC income taxes, so that will be a small difference. NJ and NY have different state income tax rates, so it'll depend on your income bracket. NJ state income taxes are generally lower unless your income exceeds $500K. You can probably simulate it with any of the free online tax calculators.
posted by snickerdoodle at 8:38 AM on September 29, 2016 [1 favorite]


Thanks - I think that's what I needed to hear - I don't make anywhere near that 500k :-)
posted by niteHawk at 8:59 AM on September 29, 2016


I am not a tax expert/accountant.
I like you, live in NJ and work in NYC. I currently have NYC income tax withheld but that ends up being a credit when filing my taxes at the end of the year. You should not being paying taxes to both NY and NJ at the end of the year. Are you not filling out a non-resident form for NY?
So if you're working in NJ and living in NJ, you will avoid having to fill in a non-resident form and you will I assume file your taxes purely through NJ. Income taxes do tend to be lower in NJ but it will depend on whether you're filing as a single person or married.
posted by shesbenevolent at 8:59 AM on September 29, 2016 [1 favorite]


Yes, to clarify, you should be getting a credit for NYC income tax if you move out of state unless you work for certain city agencies. However, it does get deducted from your paycheck and it is your responsibility file it properly.
posted by snickerdoodle at 9:36 AM on September 29, 2016 [1 favorite]


Your tax bill would likely decline slightly as your work income would shift effectively from NY State rates to the usually slightly lower NJ rates. Unless you are a municipal employee, you are not paying NYC CITY taxes because those are owed only by residents or municipal workers.
posted by MattD at 8:40 PM on September 29, 2016


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