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nikhil-mehta
Level 1

If the client workplace is Manhattan, New York and employee resides in New Jersey, which state's withholding taxes should be deducted? What shall be deduction structure?

 
1 Comment 1
john-pero
Community Champion

If the client workplace is Manhattan, New York and employee resides in New Jersey, which state's withholding taxes should be deducted? What shall be deduction structure?

Unless the two states have a reciprocity agreement or you are additional registered with the state of New Jersey then withholding is based solely on place of employment. https://www.payroll-taxes.com/articles/state-tax-reciprocal-agreements there is no reciprocity so you do have to deduct taxes based on Manhattan workplace and employee has to file two state income tax returns; they will pay what they owe to New Jersey while waiting on a refund from New York

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