How much income tax do people working in New york city and living in new jersey have to pay?
United States - 1 Answers
People's Answers, Critics, Comments, Opinions :
Answer 1 :
It's fairly complicated, because they pay tax to both jurisdictions and then take a credit to avoid double taxation. Income from work is taxed by New York City at 4% at New York State at rates that go up to 6.85%, for a total of up to almost 11%. This is from a few years ago. The numbers may have changed. All income of NJ residents is taxed by NJ at a lower rate; I think it is around 2%, but do not remember exactly. NJ residents who work in NY then get a credit for whichever is less of either their NY taxes or the NJ taxes on the income from NY. Therefore, you pay NY tax rates on your income from work in NY and NJ taxes rates on your other income, such as investment income
United States - 1 Answers
People's Answers, Critics, Comments, Opinions :
Answer 1 :
It's fairly complicated, because they pay tax to both jurisdictions and then take a credit to avoid double taxation. Income from work is taxed by New York City at 4% at New York State at rates that go up to 6.85%, for a total of up to almost 11%. This is from a few years ago. The numbers may have changed. All income of NJ residents is taxed by NJ at a lower rate; I think it is around 2%, but do not remember exactly. NJ residents who work in NY then get a credit for whichever is less of either their NY taxes or the NJ taxes on the income from NY. Therefore, you pay NY tax rates on your income from work in NY and NJ taxes rates on your other income, such as investment income
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