Live in New Jersey, Work in Tennessee: Which State Taxes Your Paycheck?
Answer
New Jersey gets all of it. Because Tennessee does not tax wage income, no Tennessee withholding exists and no Tennessee return is required — but New Jersey taxes residents on worldwide income, so every dollar earned in Tennessee still belongs on your New Jersey resident return.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. New Jersey reaches all of a resident's income, and Tennessee adds nothing on top.
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 | Tennessee | |
|---|---|---|
| Taxes wages | Yes — graduated | No |
| Reciprocity partners | 1 (Form NJ-165) | None |
| Convenience rule | Only against convenience-rule states | No |
| Nonresident return | Form NJ-1040NR | Not applicable |
| Credit for other-state tax | Schedule NJ-COJ | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | New Jersey Division of Taxation | Tennessee Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Tennessee and working in New Jersey gives:Work 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.
- Remote worker: New Jersey → TennesseeHome state only
- 1099 contractor: New Jersey → TennesseeHome state only — estimated payments
- Moved mid-year: New Jersey → TennesseeOne part-year return — the state you left
Other New Jersey pairs
Questions people actually ask
I live in New Jersey and work in Tennessee. Which state takes the tax out of my paycheck?
New Jersey gets all of it. Because Tennessee does not tax wage income, no Tennessee withholding exists and no Tennessee return is required — but New Jersey taxes residents on worldwide income, so every dollar earned in Tennessee still belongs on your New Jersey resident return.
Which state should my employer be withholding for?
New Jersey. Your employer should withhold New Jersey tax rather than Tennessee tax on these wages. If a Tennessee line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The New Jersey and Tennessee rules on this page were last checked against New Jersey Division of Taxation and Tennessee Department of Revenue 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
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07