Live in New Jersey, Work in Idaho: Which State Taxes Your Paycheck?
Answer
Expect withholding in Idaho and a return in both. New Jersey and Idaho hold no reciprocal agreement, so the overlap is resolved after the fact: Idaho taxes the Idaho-source wages, and your New Jersey resident return claims a credit for that tax against the New Jersey liability on the same income.
Last verified
Without an agreement between New Jersey and Idaho, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Idaho figure is an input to the New Jersey return, so completing New Jersey first means doing it twice.
A New Jersey resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule NJ-COJ. The credit is capped at the New Jersey 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 · IdahoForm 43
File the Idaho nonresident return FIRST — you need the Idaho tax figure before you can complete New Jersey.
- 2Resident return · New JerseySchedule NJ-COJ
File a New Jersey resident return reporting all income, then claim the credit for tax paid to Idaho. The credit is capped at what New Jersey would have charged on that same income, so if Idaho taxes it at a higher rate the difference is not refunded.
The two states, side by side
| New Jersey | Idaho | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | 1 (Form NJ-165) | None |
| Convenience rule | Only against convenience-rule states | No |
| Nonresident return | Form NJ-1040NR | Form 43 |
| Credit for other-state tax | Schedule NJ-COJ | Form 39NR |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | New Jersey Division of Taxation | Idaho State Tax Commission |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Idaho and working in New Jersey 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: New Jersey → IdahoHome state only
- 1099 contractor: New Jersey → IdahoHome state, plus the client state if you work there
- Moved mid-year: New Jersey → IdahoTwo part-year returns
Other New Jersey pairs
Questions people actually ask
I live in New Jersey and work in Idaho. Which state takes the tax out of my paycheck?
Expect withholding in Idaho and a return in both. New Jersey and Idaho hold no reciprocal agreement, so the overlap is resolved after the fact: Idaho taxes the Idaho-source wages, and your New Jersey resident return claims a credit for that tax against the New Jersey liability on the same income.
Which state should my employer be withholding for?
Idaho. The wages are sourced to Idaho, so Idaho withholding is correct and there is no New Jersey 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. New Jersey gives residents a credit for tax paid to Idaho on the same income, claimed on Schedule NJ-COJ. The credit is capped at the New Jersey tax on that income, so if Idaho taxes it more heavily the excess is not refunded by either state.
How current is this?
The New Jersey and Idaho rules on this page were last checked against New Jersey Division of Taxation and Idaho State Tax Commission 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
- Idaho State Tax Commission — individual income taxaccessed 2026-08-07