Live in Montana, Work Remotely for a New Jersey Employer: Who Taxes You?
Answer
One state, one return: Montana. New Jersey has no wage income tax, so working there changes nothing about what you owe. Your Montana resident return reports the New Jersey income along with everything else, and there is no credit to claim because New Jersey charged you nothing.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. New Jersey takes nothing, but Montana still taxes residents on income earned anywhere, so the full amount lands on your Montana return.
What you file
- 1Resident return · Montana
File a Montana resident return reporting all of your income.
The two states, side by side
| Montana | New Jersey | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 1 (Form MW-4) | 1 (Form NJ-165) |
| Convenience rule | No | Only against convenience-rule states |
| Nonresident return | Form 2 with the nonresident/part-year schedule | Form NJ-1040NR |
| Credit for other-state tax | Form 2 (credit for income tax paid to another state) | Schedule NJ-COJ |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Montana Department of Revenue | New Jersey Division of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Jersey and working in Montana gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Montana → New JerseyBoth states — credit offsets the double tax
- 1099 contractor: Montana → New JerseyHome state, plus the client state if you work there
- Moved mid-year: Montana → New JerseyTwo part-year returns
Other Montana pairs
Questions people actually ask
I live in Montana and work remotely for a New Jersey employer. Which state do I pay?
One state, one return: Montana. New Jersey has no wage income tax, so working there changes nothing about what you owe. Your Montana resident return reports the New Jersey income along with everything else, and there is no credit to claim because New Jersey charged you nothing.
Which state should my employer be withholding for?
Montana. Your employer should withhold Montana tax rather than New Jersey tax on these wages. If a New Jersey line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my New Jersey employer's location alone create a New Jersey tax obligation?
No. New Jersey sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside New Jersey are a different matter — those are New Jersey-source income and can require a nonresident return.
How current is this?
The Montana and New Jersey rules on this page were last checked against Montana Department of Revenue and New Jersey Division of Taxation on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Montana Department of Revenue — individual income taxaccessed 2026-08-07
- New Jersey Division of Taxation — individual income taxaccessed 2026-08-07
- New Jersey Division of Taxation — Convenience of the Employer Ruleaccessed 2026-08-07