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> New Jersey credits any tax paid to New York, which is staying the same. 1) I was concerned that may no longer be the case, so thanks for that, but 2) if your
by technofiend 9y ago
> New Jersey credits any tax paid to New York, which is staying the same.
1) I was concerned that may no longer be the case, so thanks for that, but 2) if your net tax burden is > $10k because of double taxation then doesn't it make sense to exit one of the two places taxing you, thus lowering your overall burden? I.E. Even if NJ Tax is $6k and NYC is $5K that still means there's a $1k incentive to no longer work in one place and live in the other. That's my point.
- lotsofpulp 9y ago"Double taxation" would be if you paid income tax in full to both NJ and NY, but that's not what happens since NJ provides a dollar for dollar credit for the income tax you pay to NY. Therefore, you only ever pay the maximum of either the income tax you owe NJ or the income tax you owe NY. You're right that the new federal tax law could incentivize people to move from places with higher state and local taxes to places with lower state and local taxes, but the differences between NJ/NY/CT are negligible. The only big difference would be moving out of New York City, as that would save you up to ~20% (federal tax rate) of 3.5% (NYC income tax rate) of your income, but I doubt many people are willing to trade in their quality of life in NYC just for that.