New Jersey is motivating telecommuters to appeal their New York tax bills. Connecticut may be next
New Jersey is incentivizing taxpayers who work from home for New York based employers to sue New York in court for taxing their wages
HARTFORD, Conn. — Telecommuting, a pandemic-era novelty that has become a permanent alternative for many people, has some Connecticut and New Jersey employees of New York-based companies questioning why they still have to pay personal income tax to the Empire State.
Their home states are wondering as well.
Fed up with losing out on hundreds of millions of dollars in tax revenue each year, New Jersey is now offering a state tax credit to residents who work from home and successfully appeal their New York tax assessment. Connecticut is considering a similar measure.
The Garden State's bounty — a rebate worth roughly half a person's refund of income taxes they paid to New York for the 2020-2023 period — has been claimed so far by one winning litigant since the state made the offer in July, according to the state’s Division of Taxation. That taxpayer received a $7,797.02 refund for their efforts. Officials hope that person's windfall will encourage others to follow suit.
Another New Jersey resident who is taking up the state's offer is Open Weaver Banks, a tax attorney who prefers working from home to braving an «awful» commute into the Big Apple. She's also filed one of a growing number of similar challenges.
“The process of doing the refund and the appeal isn’t all that intimidating to me,” said Banks, a tax partner at Hodgson Russ LLP. “I'm on New Jersey's team here. I would like to see more residents doing this. I think they have a really fair point."
New York requires out-of-state commuters who work for New York-based companies to pay New York income taxes, even if they’ve stopped
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