28 Apr I work virtually for an N.J. company. Do I owe state taxes?

Q. I recently moved to Florida but I work remotely for a company in New Jersey. The company I work for told me that because they are based in New Jersey, I still need to have Jersey taxes withheld even if my permanent domicile is Florida. Is this true and would I get my taxes back in full as a non-resident?
— Still working

A. We’re sorry to hear you’ve left the state.

Situations like yours became more common during the COVID pandemic when more people started working virtually.

Publication NJ-WT, New Jersey Income Tax Withholding Instructions, offers guidance to employers when it comes to nonresident employees, said Neil Becourtney, a certified public accountant and tax director with Smolin, Lupin & Co. in Red Bank.

“New Jersey tax must be withheld from compensation paid to nonresident employees working in New Jersey,” he said. “If a nonresident employee works inside and outside New Jersey, only the compensation paid for work performed in New Jersey is subject to New Jersey withholding.”

Becourtney said your employer’s position that it is required to withhold New Jersey tax on your wages derived from services performed entirely in the state of Florida is contradictory to the guidance contained in the state publication.

“You will have to file a New Jersey nonresident income tax return, Form NJ-1040NR, on which you will need to complete Part II on which wage income earned outside the state is allocated,” he said. “You will come down to zero days worked in New Jersey resulting in no allocation of your wage income to New Jersey.”

Assuming you have no other New Jersey source income your nonresident income tax return will reflect a full refund of the state income tax withheld, Becourtney said.

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This story was originally published on April 28, 2023.

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