USA To what state I will have to pay my state tax?

[George123]

I found a temporary job (3 months with possible extensions). I live in NY. The formal employer (who will pay me W-2) is in NJ, but they also have an office in NY. I will be working for their client which is in NJ. Due to COVID-19 I will work remotely from home (NY).

To what state I will need to pay my state tax withholding: NY or NJ, or both?

I tried to ask this question to my formal W-2 employer, but her answer was like it's up to you.

Thanks in advance for replies, I am trying to avoid penalty for low withholding state tax.

 

[SF64]

You usually pay state income tax in the state you live and unemployment tax (if applicable) in the state you work. If your employer can withhold NY state income tax, then have them do that. I live in PA and worked in NJ. My employer withheld PA income tax and I never had a problem with my tax returns and I never had to file any NJ returns.

 

[MoralesTax]

By virtue of living in NY, this means you're automatically subjected to NY income tax.

If your employer has two offices, one in NJ and one in NY, then it depends on your employer how they classify where the income is sourced. If your employer has NOT been subjecting you to NJ tax withholding, then likely they will not source income there. However, if they have been withholding NJ taxes, you should expect to file a NJ return regardless of where your income is sourced from.

It is important to mention that New Jersey is aware of this issue and they have expressed their consideration on the matter.

State of NJ - Department of the Treasury - Division of Taxation - COVID-19 Information - Telecommuting

www.state.nj.us

 

[tparvaiz]

I am in a similar situation...
- my family is in Illinois
- my employer (paying my W2) is in Illinois
- the end-client that I am working for is in TX., and for that, I have to travel a lot between states

My employer is considerate and willing to work in my favor.

Please advise