[coredog64]

If you work in NYC, you pay tax in NYC, regardless of where you live. New York has agreements with most states such that you get a tax credit in your home state for what you pay NYC, but the big Apple gets first crack at your paycheck.

New Jersey has pretty much resigned itself to this situation and gets funding via property tax.

[kmeisthax]

NY state works the same way too. If you work remotely you're still required to pay NYS income tax on your wages, even though basically no payroll company knows to check for this scenario unless you bug them about it. The technical term for this is the "convenience of the employer" rule, and in the specific case of NYS you are liable for taxes on nonresident income unless your work specifically requires you to be out of state[0] or you work from an employer-run office in another state. Remote employees like me get to pay quarterly estimated tax and then claim refunds from my resident state, which is a pain in the ass.

Aside from New York, Pennsylvania, Arkansas, Delaware, and Nebraska have the same rule. If you work for a company headquartered in any of those states you probably should be paying nonresident income taxes there just in case. My personal opinion is that "convenience of the employer" should only apply to people who regularly travel to and from the state for work, but last time I looked this up, some guy in Connecticut sued NYS and lost over that exact issue.

For the record, the tax credit isn't part of the agreement, it's a constitutional mandate. SCOTUS prohibits two states taxing the same income, they have to divide it up, so every state has a "taxes paid to another state" credit. Though, funnily enough, that credit is taxable, ASK ME HOW I KNOW.

If you wanna see some real double-tax bullshit, wait until you hear about how Americans have to pay both American and Japanese income tax if they live and work in Tokyo...

[0] i.e. it's not at the convenience of the employer

[fragmede]

FWIW, if you are actually living in Japan, your first $120k or so qualifies for Foreign Earned Income Exclusion (FEIE) so you're not actually paying double, but talk to your tax person.

[shiroiushi]

>If you wanna see some real double-tax bullshit, wait until you hear about how Americans have to pay both American and Japanese income tax if they live and work in Tokyo...

Sorry, no. I live in Tokyo, but I only pay tax in Japan. I still have to file my taxes in the US, which is a real PITA, but Americans living and working abroad get to exclude most/all of their income (unless they earn a really huge amount), and/or get a tax credit for any foreign taxes paid. Generally, an American living abroad won't pay any US taxes unless they 1) make a ton of money and 2) live in a country where the tax rate is lower than in the US.

What truly sucks about the system is just the filing requirement. Doing your taxes in a better-run country is really easy for a normal wage-earner company employee. Here in Japan, the employer generally does your taxes for you. If you have some adjustment to make, you can do that pretty easily before the filing deadline, but otherwise you don't have to do squat. In the US, everyone has to go to a lot of trouble to file their own taxes, even though the IRS usually already has all their information, basically because Intuit has bribed Congress to make it illegal for the IRS to be run as efficiently and conveniently as the tax collection agencies in Japan or Europe. A lot of Americans end up renouncing their citizenship simply because the tax-filing requirement is such a PITA.