Quick answer. You generally file a New York nonresident return (Form IT-203) for the pay the state treats as the state source, and a New Jersey resident return with Schedule NJ-COJ to claim credit for the state tax on that same income. The state counts your share by workdays, and if your primary office is in the state, tax.ny.gov says days you telecommute from New Jersey count as the state days unless your employer has set up a bona fide employer office at your home. New York City's income tax applies to city residents only.
Count your New York share of workdays
Enter your days to see the share.
Two returns for one paycheck
New York taxes nonresidents on the state source income, and tax.ny.gov says that includes earnings from work performed in New York State (Nonresident FAQs). You file Form IT-203 when you have the state source income and your state adjusted gross income, in the federal amount column, is more than the New York State standard deduction. You also file it to get back New York State, New York City or Yonkers tax withheld from your pay (tax.ny.gov).
As a New Jersey resident you file the NJ-1040 as usual. Where New York taxes the same wages, New Jersey's credit for taxes paid to other jurisdictions is claimed on Schedule NJ-COJ, enclosed with the NJ-1040. The credit is the smaller of the tax you actually paid the state and a proportional limit: the income taxed by both states, divided by the income subject to New Jersey tax, times the New Jersey tax on your total taxable income. The Division of Taxation tells filers to use only the income actually taxed by the state on the IT-203, not the federal column, and to enter the two-digit jurisdiction code on line 44 of the NJ-1040 and, from tax year 2025, on line 1 of Schedule NJ-COJ (GIT-3W).
The result in plain terms: the credit can take away most of the overlap, but it can't be more than the New Jersey tax on that income, so when New York's tax on it is higher you are not refunded the difference.
How New York decides which days are New York days
When you earn wages both inside and outside New York State, the 2025 IT-203 instructions say you must complete Schedule A of Form IT-203-B (IT-203 instructions). Schedule A walks through total days in the year, Saturdays and Sundays not worked, holidays, sick leave, vacation and other nonworking days, then total days worked, the days worked outside the state, the days worked at home included in that number, and finally the days worked in the state (Form IT-203-B).
The formula comes from New York's technical memorandum on the convenience of the employer test: The state source pay is total pay times the state working days divided by all working days, and Saturdays, Sundays, holidays, illness, vacation and leave are left out of the count. Answering occasional calls or emails on a day off doesn't make it a working day (TSB-M-06(5)I).
Remote and hybrid days: the telecommuting rule
This is the part that surprises people. tax.ny.gov answers it directly: if your primary office is inside New York State and you telecommute from outside the state, your days telecommuting are considered days worked in New York, unless your employer has established a bona fide employer office at your telecommuting location (Nonresident FAQs). Whether a home office qualifies depends on the factors in TSB-M-06(5)I: a primary factor about specialized facilities at or near the home, or a combination of secondary factors (such as the employer requiring the work be done there) and other factors (such as a separate business phone line or a home address on the employer's letterhead).
Two people with the same job can end up with different answers, so the useful thing you can do is keep a record. Write down, for every weekday, whether you were at the New York office, at home, somewhere else outside New York, or off and why. The tool above turns those counts into a share; the paid kit's Excel log does it a day at a time and totals the year in Schedule A order.
New York City and Yonkers
tax.ny.gov is plain on this point: "Nonresidents of New York City are not liable for New York City personal income tax" (Nonresident FAQs). Living in Jersey City or Montclair and working in Midtown doesn't make you a city resident. If a New York City line appears on your pay stub, ask payroll why; withheld city tax is claimed back on your IT-203. Yonkers is different: a nonresident who earned wages there files Form Y-203 when they must also file a New York State return (tax.ny.gov). Our earlier guide on whether a New Jersey resident owes city tax walks through a Hoboken and Brooklyn example.
Withholding in both states
New York. Form IT-2104.1 is the certificate you give your employer to show you're a nonresident and to allocate withholding. You can figure the New York percentage using days, miles, time or similar measures; the form's own example is two days a week in New York all year, or 40%. You must tell your employer within 10 days if you become a resident or your New York percentage changes substantially (IT-2104.1). If your hybrid schedule changed this year, that form is worth revisiting.
New Jersey. The Division of Taxation's employer instructions say an employer does not have to withhold New Jersey tax from a resident who works totally outside New Jersey, is subject to the other state's withholding, and has other-state withholding at least equal to New Jersey's. If you work part of the time outside the other state, or that state's withholding is lower, New Jersey tax is withheld as well, reduced by the other state's withholding (NJ-WT). A New York employer with no New Jersey payroll may withhold nothing for New Jersey, which is a question for your preparer about estimated payments. Our guide to W-2 boxes 15 to 20 shows where each state's figures land.
Two New Jersey rules that come up
- New Jersey offers a refundable credit to residents who successfully challenge another state's convenience of the employer rule and receive a refund. It covers tax years 2020 to 2023 only, equals 50% of the additional New Jersey tax caused by that refund, and needs a final judgment from the other state's tribunal (Division of Taxation).
- Since 2023 New Jersey has its own convenience of the employer rule for nonresidents who work remotely for a New Jersey employer, such as a New York resident with a Newark job. It doesn't change how a New Jersey resident's own wages are taxed (Division of Taxation).
What to keep through the year
- A day log: date, where you worked, and why on days you didn't.
- Your employer's written remote or hybrid policy, and where your assigned office is.
- Every IT-2104.1 you give payroll, and a pay stub from each quarter.
- Last year's IT-203 and NJ-1040 with Schedule NJ-COJ.
Moved between the states this year? The mid-year move checklist covers part-year returns, which work differently.
Sources
- tax.ny.gov: Nonresident FAQs (updated Oct. 24, 2025)
- tax.ny.gov: Nonresidents and part-year residents, who must file (updated Nov. 30, 2023)
- tax.ny.gov: 2025 Instructions for Form IT-203
- tax.ny.gov: Form IT-203-B, Schedule A (2023 fill-in version)
- tax.ny.gov: TSB-M-06(5)I, convenience of the employer test (May 15, 2006)
- tax.ny.gov: Form IT-2104.1 (12/24), certificate of nonresidence and allocation of withholding
- tax.ny.gov: New York City and Yonkers residents (updated June 30, 2026)
- NJ Division of Taxation: GIT-3W, Credit for Income Taxes Paid to Other Jurisdictions (Wage Income), January 2026
- NJ Division of Taxation: NJ-WT, New Jersey Income Tax Withholding Instructions
- NJ Division of Taxation: Refundable credit for residents who challenge another state's convenience rule (updated Apr. 22, 2025)
- NJ Division of Taxation: Convenience of the Employer Sourcing Rule (updated Apr. 9, 2025)
All sources opened and checked November 2026.
An organizer, not advice. General information checked November 2026 against the official sources listed. It is not tax, legal or financial advice and it does not decide what you qualify for; your preparer applies the rules to your return. The tool runs in your browser and nothing you enter is sent or saved. MCC Solutions is not affiliated with any agency named here.
Common questions
Do I owe New York tax for days I work from home in New Jersey?
tax.ny.gov says that if your primary office is inside New York State, your telecommuting days are considered days worked in New York unless your employer has established a bona fide employer office at your telecommuting location. The factors are in TSB-M-06(5)I.
Will New Jersey give me credit for all the New York tax I paid?
New Jersey's credit on Schedule NJ-COJ is the smaller of the tax actually paid to New York and a proportional limit based on New Jersey's tax on that income, so it can be less than what you paid New York.
Do I pay New York City income tax if I work in Manhattan and live in New Jersey?
tax.ny.gov says nonresidents of New York City are not liable for New York City personal income tax. If city tax was withheld, it is claimed back on your IT-203.
Which days count as working days on Schedule A?
Days you performed your usual duties. Saturdays, Sundays, holidays, sick days, vacation and leave are nonworking days and are left out of both the New York days and the total days.
Which form tells my employer to withhold New York tax only on part of my pay?
Form IT-2104.1, the certificate of nonresidence and allocation of withholding. Tell your employer within 10 days if your New York percentage changes substantially.
Related free pages: Do NJ residents owe NYC tax? · W-2 with two states · Mid-year move checklist · Tax deadline calendar · Tax Document Organizer (every other form for your preparer)