My employer deducts NJ state tax and I work in Texas. Can my employer stop deducting my state tax?

Question

My employer is based in NJ and I work as a consultant and right now the client is in Texas and I have been working at clients place.My employer says he is registered in NJ and therefore he has to withhold NJ tax .

Answer 1

Maybe.  You don't say where your legal home is, and that would make a difference in what state(s) you owe tax to.

Answer 2

If you work in Texas, the employer should not deduct NJ taxes.

Read this: http://taxipay.blogspot.com/2008/06/work...

Answer 3

Why do they deduct NJ taxes?  Did you live in NJ and they transferred you to Texas?  Are they based in NJ and just automatically take it out?

Are you in Texas temporarily and your permanent residence is in New Jersey?  If so, you probably will owe New Jersey taxes, so they should continue to deduct it.

Answer 4

It should since your NJ source income is zero.

Answer 5

what matters is where you live.  If you live in Texas, you don't owe taxes to NJ and can have your employer stop the withholding for NJ

Answer 6

Regardless of how you filled out your W-4, what is your state of residence?  It doesn't seem to be TX since you state you are working with a client at his TX location.

Your employer is probably not going to stop withholding tax because his reading of the withholding requirements lead him to withhold tax.  He probably considers you either stationed permanently in New Jersey, or a New Jersey resident.  A temporary assignment in TX doesn't change this.

If in fact you file a nonresident NJ income tax, you might be able to argue that you are not subject to NJ income tax (but it doesn't seem likely ).

Answer 7

If your stated permanent residence is in New Jersey, then your employer must withold NJ state tax.

If you've worked in Texas for more than a certain number of months then you'll have to file income taxes in both NJ and Texas.

Answer 8

The previous posters are correct - It depends on your residence.  

Whether  you LIVE in texas and work for a NJ based company or if you are essentially assigned to work in Tx but your residence is NJ....

You may need to take steps to legally change your residence to TX, and to change your withholding status, you will likely need to submit a W-4 to your payroll office.