Does working from home in NJ reduce my NY taxes?

Not automatically. NY's convenience rule taxes remote days unless working from home is required by the employer, not just permitted. You need employer certification that remote work is a necessity.

Do I get a full NJ credit for NY taxes paid?

Not dollar-for-dollar. The credit is limited to NJ's tax rate on the same income. NY's higher rates mean you don't get full credit.

What is New York's convenience of employer rule?

If you work remotely for your convenience (not employer requirement), NY still taxes those days. Only work performed from home because it is required by the employer escapes NY tax.

What evidence matters in a NY residency or commuter audit?

NY auditors look at cell phone geolocation data, utility usage patterns, bank login IP addresses, employer badge swipes, EZ-Pass records, medical provider locations, and children's school registrations.

NYC-NJ Commuter Taxes in 2026: The Rules Nobody Explains Clearly

Gregory Monaco, CPA
Jan 3
2 min read

NYC-NJ Commuter Taxes in 2026 blog post header with Monaco CPA branding in navy blue and gold, explaining the rules nobody explains clearly for NJ residents working in New York City — NJ residents working for NYC employers face the highest audit rates in the Tri-State area. Understanding the convenience rule, remote work taxation, and NJ tax credits is essential for 2026 compliance.

Last Updated: January 3, 2026

Quick Summary

TL;DR: No one is more confused—or more audited—than NJ residents who work for NYC employers. In 2026, the stakes rise sharply. New York is doubling down on the "convenience of employer" rule, and NJ continues taxing all resident income. Meanwhile, the IRS begins matching W-2 location data against IP addresses, employer badge swipes, and payroll withholding. Living in NJ does NOT reduce NY taxes, and remote days often don't help unless they meet extremely specific criteria.

The 2026 Commuter Audit Triggers

W-2 with NY withholding but job performed mostly in NJ
Inconsistent NY vs NJ workday logs
Employer refusing to certify remote work as "employer necessity"
Hybrid schedules with minimal documentation
NJ credit claims that exceed NY tax actually paid
Crypto or K-1 income layered onto W-2s (very common)

Understanding the Convenience Rule

New York's "convenience of employer" rule means:

If you work remotely for your convenience (not employer requirement), NY still taxes those days
Only work performed from home because it's required by the employer escapes NY tax
A signed agreement stating "hybrid optional" means NY taxes your remote days