What are taxes like for a NYC resident working in NJ?
I’m starting a job in north Jersey but will be living in Manhattan. I’ll be making approx $70k annually. What kind of taxes will I be paying? NJ or NY? NYC? Any commuter tax? Any idea of approx how much of the $70k I should expect to pay to the govt annually? Thanks for your help!
You will have to file both NY (and NYC) & NJ returns.
On your paycheck, you will have NJ withholding (in addition to federal withholdings, medicare, Soc. Sec, among others), you should also consider having your employer withhold NYS/NYC taxes.
The reason being, NYS + NYC are taxed at a higher rate than NJ. Despite the fact you will be receiving a resident credit on your NYS/NYC return on the taxes paid to another state (NJ), you will still likely be short in covering the tax liabilites in NYS/NYC, unless you have a signficant amount of itemized deductions.
On the flip side, if you work in NYC and lives in NJ, generally you wouldn’t need to withhold NJ taxes.
By the way, in most cases, you will have to file NYS/NYC resident return and NJ non-resident return.
Your tax rate (using the highest rate group – single filing status assumption):
Soc Sec 6.2%
Med 1.45%
Fed: 25%
NY: 6.85%
NYC: 3.648%
NJ: 5.525%
Note, as mentioned earlier, you will be getting a resident credit from NJ on your NY/NYC return for the taxes paid in Jersey. So, your actual income tax rate on NY/NYC will be lower because of the resident credit.
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