Telecommuting has become a permanent alternative for many employees of New York-based companies in Connecticut and New Jersey, raising questions about why they are still required to pay personal income tax to New York. In response to losing out on significant tax revenue, New Jersey is offering a state tax credit to residents who work from home and successfully appeal their New York tax assessment, with Connecticut considering a similar measure.
New Jersey's tax credit, which amounts to roughly half of the income taxes paid to New York for the 2020-2023 period, has already been claimed by one individual, receiving a refund of $7,797.02. This initiative aims to encourage more residents to challenge their tax assessments. The issue stems from New York's requirement for out-of-state commuters working for New York-based companies to pay New York income taxes, even if they primarily work from home, unless they meet strict criteria for a bona fide home office.
