New Jersey vs New York City taxes

The city tax is the difference

On $75,000 a single filer who lives and works in New Jersey keeps $58,491; one who lives and works in the five boroughs keeps $55,521. That is $2,970 a year more in New Jersey, and most of it is a single line.

New York City income tax, $2,263 on $75,000 after the school tax credit. New Jersey has nothing like it.

State income tax is closer: $2,596 in New Jersey, $3,453 in New York. New Jersey’s low bottom bands, 1.4% on the first $20,000 and 1.75% to $35,000, make it the cheaper of the two on a typical salary.

Payroll deductions run the other way. New Jersey takes three, unemployment and workforce funds, temporary disability insurance and family leave insurance, together $505. New York’s paid family leave and disability insurance come to $355.

New Jersey keeps more at every salary, single or joint, and the gap grows with the city tax: $5,067 on $150,000 and $8,409 on $250,000. A married couple filing jointly on $150,000 keeps $5,671 more in New Jersey, of which $4,549 is city tax.

Living in Jersey City, working in Manhattan

The columns above assume you live and work on the same side of the river. Many people choosing between the two don’t: they live in New Jersey and commute into the city. For them neither column is quite right, and the rules are these.

New York taxes the wages you earn there. Income tax follows where the work is done, so New York taxes a New Jersey commuter’s Manhattan wages as a nonresident.

New Jersey taxes you as a resident, with a credit. New Jersey taxes your whole income, then gives a credit for the New York tax paid, capped at what New Jersey would have charged on the same income. There is no reciprocal agreement between the two states. The result is that you pay roughly the higher of the two states’ income taxes on those wages. At every salary from $50,000 to $500,000 that is New York's.

No New York City tax. The city tax is a resident tax; it follows where you live, not where your office is. Commuting from Jersey City or Hoboken avoids it entirely.

So on $75,000 a commuter’s state income tax comes to roughly $3,453. A resident of the five boroughs with the same job pays $5,716 in state and city income tax together. The commuter’s saving is essentially the city tax; on state tax alone, living in New Jersey saves a commuter little or nothing.

If you work remotely for a New York employer from a New Jersey home, New York’s convenience of the employer rule can treat those home days as New York days too. Confirm how your days will be counted before relying on the New Jersey column.

What the comparison leaves out

Rent, property taxes and the cost and time of the commute differ widely between the Jersey side and the boroughs, and for most households they matter more than the gap above. This page compares only what is taken from wages.

Questions people ask

Do you take home more in New Jersey or New York City on $75,000?

New Jersey, by $2,970 a year, or $247 a month, for a single filer in 2026. That counts federal tax, Social Security, Medicare, state income tax and every state payroll deduction, plus local income tax.

Is the difference the same at every salary?

No, but the same side stays ahead. The gap is $1,132 a year at $30,000 and $8,409 at $250,000, for a single filer.

Does Jersey City, Hoboken or Newark have a local income tax?

No. No New Jersey municipality levies its own income tax, so the New Jersey column holds anywhere in the state. New York City's income tax falls only on residents of the five boroughs.

Is there a reciprocal agreement between New Jersey and New York?

No. New Jersey has one with Pennsylvania, but not with New York. A New Jersey resident working in New York files a nonresident New York return and a New Jersey resident return, and claims a credit on the New Jersey return for the New York tax paid.

I live in Brooklyn and work from home for a New Jersey company. Do I pay the city tax?

Yes. The city tax depends on where you live, not where your employer is, so a resident of the five boroughs pays it on all of their wages wherever the job is based.

What this comparison covers

Income tax and payroll deductions on wages: federal income tax, Social Security, Medicare, state income tax, every state payroll deduction, and local income tax where there is one. It does not compare sales tax, property tax, housing or the cost of living, which can outweigh the difference in take-home pay. Figures assume the standard deduction, no dependents and no pre-tax retirement contributions. See how we calculate.