Rep. Josh Gottheimer (D-5) joined State Sen. Steve Oroho (R-24) in blasting the State of New York’s attempts to collect income tax from New Jersey commuters who have been working remotely since the start of the coronavirus pandemic.
During a joint press conference in Hardyston April 28 to announce a letter to the U.S. Treasury Secretary and IRS Commissioner the legislators co-signed asking for new guidance to ensure states cannot tax those who neither live nor work within its boundaries.
“Doing so will help New Jersey families keep more of their hard-earned dollars in their own pockets, and to ensure their tax dollars are going to support our own state, instead of someplace else,” said Gottheimer.
The legislators noted about 400,000 New Jersey residents typically commuted to New York daily to work before the pandemic, with income taxes for those New Jersey commuters equaling the total income tax owed by 1.3 million in the Western New York region.
Overall, New Jersey commuters would pay nearly $3 billion to New York instead of New Jersey. The state joined Connecticut, Iowa, and Hawaii in submitting an amicus brief in a Supreme Court case arguing states should not have the ability to tax non-residents’ income while they are working from home.
Savings for New Jersey Residents
Oroho and Gottheimer outlined how New Jersey residents would have lower taxes if they only had to pay New Jersey state income tax as New York’s rates are higher:
- A teacher living in New Jersey and making $50,000, who worked from home over the past year rather than commuting into New York, would save $1,500 if they only had to pay New Jersey state taxes.
- A New Jersey commuter making $100,000 would save $2,900.
- A New Jersey commuter making $200,000 would save $8,555.
“In a clear overreach of state-level taxing authority, New York is attempting to apply their state tax regime upon New Jersey residents who have not worked in their state since the pandemic began,” said Gottheimer. “Yes, the King Moochers—New York City— is now attempting to continue their state tax regime and take income tax dollars from New Jersey residents, those who formerly commuted to their state, even though they aren’t commuting anymore.”
In their letter, the two lawmakers stated “For many of our constituents, given modern technology, this shift to working from home may become a permanent arrangement with their employers…Their hard-earned income tax should support their local community, not taken across state lines to be spent by a different state government with no connection or accountability to them, the taxpayer.”
Avoiding Double Taxation
“This is a clear overreach of state authority — and Steve and I, along with others, are fighting back — not only for New Jersey families, but for the State of New Jersey who deserves to keep these dollars here,” stated the 5th District Congressman.
Oroho and Gottheimer noted New Jersey credits residents for taxes paid to other states to avoid double taxation, with $1.2 billion expected to be credited to New Jersey workers on their 2020 state income tax forms for taxes paid to New York.
“This is a billion-dollar issue,” stressed Oroho, who along with State Sen. Paul Sarlo (D-36), passed a bill on the subject that is awaiting Assembly approval.
“These resources could instead be used to help fund schools or lower the cost of living in New Jersey, such as helping fund the Senior Freeze program and the Homestead Benefit program. These programs provide vital property tax relief to lower-income and elderly homeowners in New Jersey, which has the highest property taxes in the nation,” Oroho wrote.
The issue is similar to another that garnered the ire of Gottheimer and other legislators: New York City is looking to tax Garden State commuters for passing the George Washington Bridge.