New York state’s income tax hike on wealthy taxpayers may have caused a surprising drop in neighboring New Jersey’s tax collections, a New Jersey budget expert said on Tuesday.
New Jersey residents who work in New York get credits on tax bills for the income tax payments they owe New York.
Last year, the Empire State raised the tax rate for annual income above $300,000 to 7.85 percent and for annual income above $500,000 a year to 8.97 percent.
But New York used a “recapture” provision — which was obscured by New York officials and missed by tax experts — to instead tax the entire income of these wealthy individuals at the two higher rates, according to written testimony by David Rosen, New Jersey legislative budget and financial officer.
Full story: NY income tax hike may hurt NJ tax collections – Yahoo! News
