NY/NJ payroll Taxes

[mircpa]

Hello everybody

I have a question hope someone will provide guidance. Have a client who resides in Edison, NJ would be commuting 70 miles both ways everyday to New york city for providing software consulting services. Client insists on floating NJ corporation, paying payroll taxes in NJ and at end of year would file NY non-resident & pay taxes, but i was inclined towards NY corporation and complying NY & NYC payroll taxes.

thanks to all who responds

[TAXBILLY]

Don't see the advantage of a NY Corp vs NJ Corp. NYC does not tax non residents.

taxbilly

[SunTaxMan]

It appears that "residence" (tax home) for 1040 is New Jersey.

Questions: (1) Is this NY client the "only" client tp will have? (2) Any potential for future clients, or existence of current clients, elsewhere than in NY? (3) Does tp have an "office" (read that as "permanent address") in NY (that would justify a NY based Corp) or is business "based" in NJ (that would indicate a NJ based corp)?

If this NY client is the tp's ONLY client, perhaps 'employee' is more appropriate - worth a consideration?

If tp's business is based in NJ, is working in NY business miles (rather than commuting)? (because this is only ONE of several clients, admininstered from NJ "home office?"

Is this an otherwise 'home-based' business?

Perhaps a further dimension to the issue is, 'Is this tp marketing his business to anyone other than this ONE client?' Or is this a 'permanent,' or otherwise looonnng term, gig?

I guess my thinking is "facts and circumstances" dictate where the business "tax home" is located, not tp's 'preference' - regardless of tp's reasons for the preference.

[mircpa]

SunTaxMan

1.For our discussion and currently yes NY client is only taxpayer's client.

2. Taxpayer currently thinks of providing software consulting services to only of his client based in NY & this corporation would solely be floated to use for these services

3.Taxpayer does not have nor does he intends to open an office in NY, would plan to use his home address in NJ as NJ domiciled corporation.

Of course there would be payroll, my question is should he be subject to NY/NYC withholding & NY unemployment OR NJ

I appreciate your responses

[kcjenkins]

Since he will be doing the work in NY, he will be subject to NY/NYC withholding, unemployment tax, etc. But that can be done just as easily through a NJ business, if that is what he wants.