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Withholding Taxes: New Jersey

Withholding Taxes requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

  • Income tax withholding in New Jersey depends on whether an employee is a resident or nonresident of the state. Special provisions apply to New Jersey residents who are employed in Pennsylvania based on a reciprocal agreement between the two states. Expatriates of New Jersey are subject to withholding on their worldwide income. See Withholding on Residents, Nonresidents and Expatriates.
  • Employers can accept from employees either IRS Form W-4, or the state equivalent Form NJ-W4. See Employee Withholding Forms.
  • The method of withholding on supplemental wages, such as bonuses, commissions, overtime pay, sales awards, tips, etc. depends on whether they are paid at the same time as regular wages or separately. See Supplemental Wages.
  • Employers must provide all employees with a federal Form W-2, Wage and Tax Statement, for a calendar year, and any corrected statements made for that year, no later than February 15 following the end of the year. See Form W-2 Requirements.
  • All public and private employers are required to give written notice to potentially eligible employees of the availability of both the federal and New Jersey earned income tax credits when they give employees their annual federal Forms W-2, Wage and Tax Statement. See Earned Income Tax Credit Notices.
  • Localities including Jersey City and Newark have requirements pertaining to withholding taxes. See Local Requirements.