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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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A New York resident - works out of a New Jersey office. He

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A New York resident - works out of a New Jersey office. He does some travel for his employer both domestic & foreign about 15% of his time and travels to New York offices for meetings etc about 14% of the time. The employer does not breakdown his w-2 so everything shows as New Jersey income. What is New Jersey's taxable income include?
Submitted: 4 years ago.
Category: Tax
Expert:  Merlo replied 4 years ago.

Hello JA Customer,

 

If you physically work in the state of NJ, then the income you receive from your employer is taxable in that state. Occasional travel to other states or overseas, or occasional meetings that you attend in another state, are not taxable in the states that you travel to.

 

If you were for some reason to be temporarily assigned to work for 2 or 3 months out of the NY office, then the income you received during that time period would be taxable in the state of NY. But occasional office visits to a branch in another state or occasional travel to different states is not taxed in each state on a day to day basis.

 

When you file your tax return at the end of the year, you will file a return with the state of NJ as a non resident, and you will report all of your income from this employer. You will also file a resident return with the state of NY since that is where you live, and that return will include all of your income from all sources. But NY will then allow you a credit for the taxes already paid to NJ, so you are not double taxed at the state level on the income from NJ.

 

If this was helpful please press the Accept button. It is the only way we receive any credit for helping with these questions.

 

Thank you JA Customer

 

 

Customer: replied 4 years ago.
New York is currently stating that the NY time 14% and the Travel time of 15% is time not worked in NJ and therefore not eligable for the NJ Credit on the NY return. Therefore, if this time is being taxed in NY will NJ adjust for this time as not NJ income.
Expert:  Merlo replied 4 years ago.

Hello again Tom,

 

This is a somewhat unusual position that the state of NY is taking in comparison to other states. Take an example where a salesman works for a company based in Chicago, but his territory covers the entire midwest, so he may travel to as many as 20 different states during the year to call on his clients. According to New York's method, he would have to file 20 different tax returns at the end of the year which is ludicrous.

 

Unfortunately even if the state is insisting that this is not NJ income, unless your employer is willing to change your W-2 form and allocate your income between the various states, that would be the only way that NJ allows you to make an adjustment and not claim this as NJ income.

 

I can only suggest that you present your situation to your employer and see if under the circumstances he is not willing to breakdown your W-2 to show income based on the actual states you traveled to.

 

If this was helpful please press the Accept button.

 

Thank you Tom

 

 

Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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