Live in Idaho, Work in New Jersey: Which State Taxes Your Paycheck?
Answer
Both states tax the same wages, and a credit undoes the overlap. New Jersey withholds as your work state and you file a New Jersey nonresident return; Idaho taxes residents on all income, so you also file at home and claim the credit for tax paid to New Jersey. File New Jersey first.
Last verified
Without an agreement between Idaho and New Jersey, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the New Jersey figure is an input to the Idaho return, so completing Idaho first means doing it twice.
A Idaho resident taxed by another state on the same income claims the credit for taxes paid to other states on Form 39NR. The credit is capped at the Idaho tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · New JerseyForm NJ-1040NR
File the New Jersey nonresident return FIRST — you need the New Jersey tax figure before you can complete Idaho.
- 2Resident return · IdahoForm 39NR
File a Idaho resident return reporting all income, then claim the credit for tax paid to New Jersey. The credit is capped at what Idaho would have charged on that same income, so if New Jersey taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Idaho | New Jersey | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | None | 1 (Form NJ-165) |
| Convenience rule | No | Only against convenience-rule states |
| Nonresident return | Form 43 | Form NJ-1040NR |
| Credit for other-state tax | Form 39NR | Schedule NJ-COJ |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Idaho State Tax Commission | 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 Idaho gives:Both states — credit offsets the double tax.
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.
- Remote worker: Idaho → New JerseyHome state only
- 1099 contractor: Idaho → New JerseyHome state, plus the client state if you work there
- Moved mid-year: Idaho → New JerseyTwo part-year returns
Other Idaho pairs
Questions people actually ask
I live in Idaho and work in New Jersey. Which state takes the tax out of my paycheck?
Both states tax the same wages, and a credit undoes the overlap. New Jersey withholds as your work state and you file a New Jersey nonresident return; Idaho taxes residents on all income, so you also file at home and claim the credit for tax paid to New Jersey. File New Jersey first.
Which state should my employer be withholding for?
New Jersey. The wages are sourced to New Jersey, so New Jersey withholding is correct and there is no Idaho withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Idaho gives residents a credit for tax paid to New Jersey on the same income, claimed on Form 39NR. The credit is capped at the Idaho tax on that income, so if New Jersey taxes it more heavily the excess is not refunded by either state.
How current is this?
The Idaho and New Jersey rules on this page were last checked against Idaho State Tax Commission 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.
- Idaho State Tax Commission — 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