- NJ BAIT & NY PTET electionsEntity-level elections that can cut business owners' federal tax.Learn more about NJ BAIT & NY PTET elections →
- New York residency auditsDomicile, the 183-day rule and day-count defense when you leave New York.Learn more about New York residency audits →
- New York City taxesCity resident tax, the UBT and how the city treats S corporations.Learn more about New York City taxes →
- Equity compensation across statesHow New York taxes RSUs and options after you move.Learn more about Equity compensation across states →
The basic rule
Your work state taxes the wages you earn there, and your home state taxes all of your income but generally gives you a credit for tax paid to the other state on the same income. Done correctly, you pay roughly the higher of the two states' tax, not both.
- New Jersey resident, New York job: a New York nonresident return (IT-203) and a New Jersey resident return claiming a credit for the New York tax.
- New York resident, New Jersey job: a New Jersey nonresident return and a New York resident return with a credit for the New Jersey tax.
Remote and hybrid work
New York's "convenience of the employer" rule generally treats days you work from home outside New York, for your own convenience, as New York workdays when your office is in New York. That can mean New York taxes wages earned at your kitchen table in New Jersey. The details of your arrangement matter, so it's worth reviewing how your days are counted.
Do New Jersey and New York have a reciprocal agreement?
No. New Jersey's only reciprocal income tax agreement is with Pennsylvania. Without one, a New Jersey resident who works in New York has New York tax withheld, files in both states, and claims a New Jersey credit for the New York tax.
Withholding when you work across state lines
- Your New York employer withholds New York tax on your New York wages.
- New Jersey can still tax income New York doesn't, such as investment income, so some commuters owe New Jersey at filing time. Adjusting withholding or making estimated payments avoids surprises.
- For remote and hybrid work, confirm how your employer is allocating your days, especially under New York's convenience rule.
New York City
New York City income tax applies to city residents. Nonresidents who commute into the city don't pay city income tax on their wages.
Moving between states
In the year you move, you'll generally file part-year resident returns in both states, splitting income by when you lived where. Watch for:
- Statutory residency. New York can treat you as a full-year resident if you keep a permanent place of abode there and spend more than 183 days in the state.
- Equity compensation. New York can tax part of your RSUs and options after you leave, based on days worked in New York between grant and vesting.
- Withholding. Make sure your employer updates your state withholding so you aren't facing a large bill or a long wait for a refund.
Frequently asked questions
I live in New Jersey and work in New York. Do I pay tax to both states?
You file in both states, but New Jersey generally gives you a credit for the New York tax on the same wages, so you aren't taxed twice on that income.
I work from home in New Jersey for a New York employer. Which state taxes me?
Possibly New York, under its convenience-of-the-employer rule, if your remote days are for your convenience rather than your employer's necessity. Your specific arrangement matters.
Do New Jersey and New York have a reciprocal tax agreement?
No. New Jersey's only reciprocal agreement is with Pennsylvania. New Jersey residents who work in New York file in both states and claim a New Jersey credit for the New York tax paid.
Do I owe New York City tax if I commute into Manhattan?
Not if you live outside the city. New York City income tax applies to residents.
I moved from New York to New Jersey this year. What do I file?
Generally part-year resident returns in both states, with income allocated by residency period, plus any New York-source income after the move.