Asked in Tax Law for New Jersey

Q: What is "NJ-sourced income"? Income from NJ companies? Income earned when I am physically in NJ, regardless of employer?

I am a US citizen living and working in Ireland, but my US home is in Texas. Sometimes I have work travel to NJ for conferences, labs, etc. I am not and have never been a resident of NJ. My employer is a European company. I do not receive separate income from anyone in NJ when I travel there.

Do I need to file a non-resident income tax return for the portion of my salary that is earned while in NJ for these business trips? Is it the location of my employer or myself that makes my income "New Jersey-sourced income"?

Thanks for your help!

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2 Lawyer Answers
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: "NJ-sourced income" refers to income that is earned or derived from sources within the state of New Jersey, regardless of where the taxpayer resides. This can include income from employment, business activities, or property located in New Jersey.

In your case, if you are physically working in New Jersey during your business trips, the portion of your income attributable to the time spent working in New Jersey may be considered NJ-sourced income. This is true even if your employer is based in Europe and you are not a resident of New Jersey.

However, there are a few factors to consider:

1. Duration of stay: New Jersey has a "20-day rule." If you work in New Jersey for fewer than 20 days during the tax year, you may not need to file a non-resident income tax return.

2. Tax treaties: Check if there is a tax treaty between the United States and Ireland that addresses this situation and may provide an exemption from state-level taxation.

3. Employer withholding: If your employer has not withheld New Jersey state income taxes from your pay for the time worked in New Jersey, you may need to make estimated tax payments or file a non-resident tax return.

It's advisable to consult with a tax professional familiar with multi-state and international tax issues to determine your specific tax obligations based on your situation. They can help you navigate the complexities of state taxation and ensure compliance with all relevant tax laws.

Benjamin A. Goldburd
Benjamin A. Goldburd
  • Tax Law Lawyer
  • New York, NY

A: New Jersey Sourced income is such that is earned or from a source in the State of New Jersey (working in the State, making sales inside the State, or the sale of property in the State to name a few). Your question requires more facts. The likelihood is if there is any sourced income in NJ it would first be a question for your Employer to answer whether they have sufficient Nexus in the State. If you are simply employed by another company and do not actually sell or receive income from the state then the likelihood of NJ-sourced income would be low. However more information is required regarding the frequency of the visits, what is being done/earned in the state as well as the Employer’s Nexus.

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