Why is withholding tax due to New York if the employees work in a neighboring state?
New York State (NYS) income tax rate is usually higher than that of any of the neighboring states. When a resident of NYS works in New Jersey (NJ), for instance, the employer is only required to withhold NJ tax for that state. However, the employee will not have enough tax withheld upon for NYS. As a result, the difference between the two tax rates must be withheld and remitted to NYS.
