nyc: I live in Northern NJ and i'm entertaining job opportunities in Manhattan(NYC) some people tell me that i need to account for "double taxes" when negotiating for a salary. I just want to know how much more i should expect to pay in taxes when working in NYC vs. any other location in New Jersey. Thank you in advance for any insight you can provide.|||Contrary to what Walter said, MOST states tax income that is earned in their state. There are some states that have reciprocal agreements with neighboring states that will not tax residents of those states. This is the exception, not the rule. You will need to file a resident return in NJ and a non-resident return in NY. I don't think you will be liable for NYC taxes. You will get a credit on your NJ return for taxes paid to NY. The credit will be equal to the lower of the taxes paid to NY or the tax NJ charged on the income. Your employer does not have to withhold NJ tax unless he has a location in that state. He will withhold NY tax. So, in that sense you are double taxed. You may owe NJ tax because none was withheld, but with the credit, its as if you where only taxed by one state.|||Sharontha, your friends are only partly right about double taxes. New York, unlike most other states, taxes the earnings of non-residents who work there. Most other states allow you to be taxed only by your state of residence. This means that you will have to file two state income tax returns, a non-resident form for NY (the instruction book for this form is 93 pages), and a resident form for NJ. At your expense, of course. On the NJ return, you may claim a credit for the tax paid to NY, which will cut way down on your NJ tax, so adjust your withholding accordingly. There is no way I can suggest which state will give you a better tax deal without working out your taxes for each state, but the problem is, with the current system, you will wind up paying the maximum. I wish I had better news. And besides the NY state tax, there's a city tax if you work in NYC.