Live in New Jersey, Work Remotely for a New Mexico Employer: Who Taxes You?
Answer
One state, one return: New Jersey. New Mexico has no wage income tax, so working there changes nothing about what you owe. Your New Jersey resident return reports the New Mexico income along with everything else, and there is no credit to claim because New Mexico 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 Mexico takes nothing, but New Jersey still taxes residents on income earned anywhere, so the full amount lands on your New Jersey return.
What you file
- 1Resident return · New Jersey
File a New Jersey resident return reporting all of your income.
The two states, side by side
| New Jersey | New Mexico | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 1 (Form NJ-165) | None |
| Convenience rule | Only against convenience-rule states | No |
| Nonresident return | Form NJ-1040NR | Form PIT-1 with Schedule PIT-B |
| Credit for other-state tax | Schedule NJ-COJ | Form PIT-1 (credit for taxes paid to another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | New Jersey Division of Taxation | New Mexico Taxation and Revenue Department |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Mexico and working in New Jersey 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: New Jersey → New MexicoBoth states — credit offsets the double tax
- 1099 contractor: New Jersey → New MexicoHome state, plus the client state if you work there
- Moved mid-year: New Jersey → New MexicoTwo part-year returns
Other New Jersey pairs
Questions people actually ask
I live in New Jersey and work remotely for a New Mexico employer. Which state do I pay?
One state, one return: New Jersey. New Mexico has no wage income tax, so working there changes nothing about what you owe. Your New Jersey resident return reports the New Mexico income along with everything else, and there is no credit to claim because New Mexico charged you nothing.
Which state should my employer be withholding for?
New Jersey. Your employer should withhold New Jersey tax rather than New Mexico tax on these wages. If a New Mexico line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my New Mexico employer's location alone create a New Mexico tax obligation?
No. New Mexico 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 Mexico are a different matter — those are New Mexico-source income and can require a nonresident return.
How current is this?
The New Jersey and New Mexico rules on this page were last checked against New Jersey Division of Taxation and New Mexico Taxation and Revenue Department 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.
- New Jersey Division of Taxation — individual income taxaccessed 2026-08-07
- New Jersey Division of Taxation — Convenience of the Employer Ruleaccessed 2026-08-07
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07