I am a New york resident and i recently heard that you have to pay tax for both states? i dont know much about taxes so any ideas on if i have to pay? Cos maybe like the holland tunnel fee going into NYC cost money but going out doesnt so if im trying to work in NJ?
United States - 2 Answers
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1 :
There is no "double tax" per se. What happens is that if you work in NY you are taxed by NY and NJ but when you complete your taxes at year end, you get an allowance for your NY taxes on your NJ taxes. You have to complete tax returns for both NY and NJ. The same thing happens if you live in NY and work in NJ.
2 :
And then you'll pay the Holland Tunnel toll going home. In the simplest terms, you'll pay the higher tax of the two states. You'll file a non-resident tax return with the state where you work. Any tax that you pay to the state where you work will be used as a credit to the state where you live. Example: You work in NY but live in NJ. The tax you owe NY is $1000 and the tax you owe NJ is $700. When you file your NJ return, you won't owe them any money because what you paid NY more than covers it. OK, now say you owe NY $700 and NJ $1000. When you file your NJ return, you will only owe them $300 since you get a $700 against the $1000. Nothing with New York is simple. However, New Jersey has an agreement with Pennsylvania where if you live in one state and work in the other, you owe have to file with the state where you live.
