Need to pay NJ income tax if working remotely for a company in another state? (living in)

[td2456]

Hi,

My wife works in NJ and works remotely for a company in NC. NC tax service told us need to pay NC tax. Do we need to pay NJ income tax as well?

What if works remotely for a Texas branch of a Michigan company? (Texas normally does not charge state tax.)

Thanks a lot,

Tony

[johnrex62]

As a 100% traveling consultant, I can tell you how I am treated by IRS and the various states I have worked at.

When I lived in Alabama and North Carolina, I paid resident income tax on all wages earned regardless of where I earned them. North Carolina gave me a deduction for taxes paid on those wages to other states, Alabama did not. So while living in NC, I paid NC taxes on all wages earned, Alabama taxes to Alabama for those wages earned in Alabama and Colorado Taxes on those wages earned in Colorado. While living in Alabama, I paid taxes on all wages to Alabama, taxes on wages earned in Virginia to Virginia, taxes on wages earned in Colorado to Colorado.

When I moved to Texas, I no longer have any resident state income tax, but I still have to pay taxes on wages earned in other states to those states. When I work in Alabama I have to pay taxes on those wages earned in Alabama, when I work in Virginia I have to pay Virginia taxes on those wages earned in Virginia.

Since you are working remotely instead of traveling, I think the state's position is that you are working remotely for a company that has a physical worksite you are supporting. Thus, NC is charging for wages earned through that physical location you are supporting. I would suspect that since the Michigan company has a physical location in Texas, your taxes would be based as if you were physically in Texas and you would have no out of state tax liability in that case.

You will always have a tax liability for the state you reside in, even if you never do any work there.

[SkipChurch]

Yep. What he said. You earned the money in NJ. NJ tax won't care if you were hooked up elsewhere. Sometimes there are "tax treaty" kind of deals-- as between NJ and PA-- where double taxation is eliminated. But usually not. Most notoriously is the whacking great NY Non-Resident Tax, which is designed to bleed CT anf NJ commuters white.

So to speak.