As a new New Jersey employer, how do I withold taxes for New York resident employees?

Question

Is it correct that as a NJ employer, I must withhold NJ taxes for all employees (even employees that reside in New York state) and that I should not withhold NY State or NY City taxes?

If so, how do employees that live in New York state and possibly New York City, receive a credit for taxes paid in NJ?

Can my business do any witholding for NY State and/or NY City taxes?

Answer 1

Out-of-state employers who are not incorporated or licensed under New York State law and do not maintain an office or transact business in New York State are not required to withhold New York State, New York City, or Yonkers income taxes on the wages of employees who reside in New York State. However, if an out-of-state employer agrees to withhold New York State, New York City, or Yonkers income taxes for the convenience of the employee(s), the employer is then subject to New York State withholding requirements as outlined in this publication. If the employer does not withhold New York State, New York City, or Yonkers income taxes, the employee may be required to make estimated payments of such income taxes using Form IT-2105,
Estimated Income Tax Payment Voucher for Individuals.

Answer 2

Yes you have to withhold. If you don't know the answer to your our question, you need a good accountant.