Client in NYC, Employer in NJ, Self-employed

Where do you physically do the work?

Seth

If you are doing the work in NYC, I believe you have to pay NY taxes and get a credit on your NJ return. It makes econonic sense that income should be taxed at the location of the labor rather than at the residence of the laborer.

Katie, the resident authority on State taxation, is the best person to explain the problems of a NJ S-corp doing business on-site in NYC.

Dick

First of all, you are not self employed if you work for an S corp (even if you own 100% of it). You are an employee, who gets a W2, as you indicated above. With regard to NYS & NYC taxation, you have to go through their nexus rules to determine if your activities create nexus there. It could be a different answer for you the individual employee and the S corp, depending on the facts and circumstances. Sounds like you should contact your CPA/tax advisor and explain your situation and nexus questions. ___________________________________

-----> real address on hobokeni or hobokenx

Since you (and by extension, your corporation) are performing services in NY, both you as an individual and your S corporation are subject to NY tax. You are not self-employed; you are an employee of your corporation. Your wages are NY source income to the extent you perform the services to earn them in NY. NJ will give you credit on your individual income tax return for the tax you pay to NY on your NY earnings, limited to the proportion of your NJ tax liability that relates to that income, Your corporation is doing business in NY and must obtain a certificate of authority from the NY Secretary of State, and must register as an employer and withhold NY state income tax on your wages for services performed there. The corporation will be subject to the NY fixed- dollar minimum tax, which ranges from $100 to $1,500 annually, depending on the amount of gross payroll. (If total gross payroll is $250,000 or less; the tax is $100; if more than $250K but not more than $500K, it is $225.) Also, in order not to be treated as a C corporation for NY purposes, the corporation must make a separate S election for NY. S corporations are not subject to a measured tax in NY after 2003. Katie in San Diego