Can N.J. tax me twice on out-of-state income?


Q. Does a New Jersey resident have to pay income tax on rental income from another state?
— Landlord

A. You know New Jersey likes to get a piece of everything it can, tax-wise.

But you can’t be taxed twice on the same income.

If you are a New Jersey resident with income from sources outside New Jersey, you may be eligible for a credit on your New Jersey tax return, said Martin D. Hauptman, an attorney with Mandelbaum Salsburg in Roseland.

“You may qualify for a credit if you paid income or wage tax on the same income in the same year to both New Jersey and to another jurisdiction outside New Jersey,” he said. “You cannot claim a credit for income tax paid to the federal government, Canada, Puerto Rico, or any other foreign country or territory.”

Hauptman said New Jersey requires you to pay tax on all of your income, regardless of where it is earned.

“The credit reduces your New Jersey income tax liability so that you don’t pay taxes twice on the same income,” he said. “This is not a refund of the taxes you paid to another state or city. Your credit cannot be more than the amount you would have paid if you earned the income in New Jersey.”

Email your questions to .

This story was originally published on April 25, 2019. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.