Are there any extra taxes or complications with working in a different state than you live?

Question

I am going to work in NJ but possibly live in NY. I heard that I would have to pay state tax out of my paycheck in both states. Is that true?

Is it legal to claim residence in a place you have access to, but don't actually go?

Answer 1

When I was in college, I was a resident of Wisconsin and worked in both Alaska and Illinois over the 4 summers.

At the time, Wisconsin would make me pay taxes on my wages, but the total tax paid could not exceed the amount of taxes could not exceed the amount of taxes that normally would have been paid in Wisconsin.

In Alaska, I paid roughly 0.5% tax (no state tax, just a small city tax). Wisconsin charged about 5% tax rate. Not bothering with standard deductions and such, I had to pay Wisconsin the extra 4.5% so that the total amount of taxes would be the same as if I made the money in WI.

When I got married about 5 years ago, I lived in Illinois and my wife lived in Wisconsin. I found out that Wisconsin and Illinois had an agreement that income from one state would be considered income from the other. So if I lived in WI and paid taxes in IL from my paycheck, WI would just let it be.

Tax laws change every year. I'd recommend going to a tax preparer the first year or two until you get the hang of the laws. Taxes become worse than a case of hemorrhoids when you cross state lines.

Answer 2

to avoid double state taxes just get a NJ state id,or use a relatives address in Jersey

Answer 3

Yes. You pay for both, NJ and NY. There are ways around it. However, they are as they say "Cheating the systom"