Comparing New Jersey vs. New York taxes highlights differences in how income, property and sales taxes affect residents on both sides of the Hudson River. New York typically imposes higher income tax rates, especially on high earners, while New Jersey’s property taxes rank among the highest in the country. Sales tax rates are also different, with New York City offering certain exemptions that New Jersey does not. Tax credits and reciprocity rules can also influence the overall tax burden for those who live in one state and work in the other.
Finding a financial advisor can help you prepare for your next tax filing while helping you plan ahead for the future as you grow your wealth.
Income Taxes
Both New Jersey and New York employ progressive income tax systems that apply higher tax rates as income levels increase.
New Jersey’s marginal income tax rates range from 1.4% to 10.75%. However, tax brackets for married couples filing jointly are not simply double those of single filers; they have distinct thresholds as shown below.
In New York, tax brackets for married couples filing jointly are approximately double those of single filers. Additionally, residents of New York City and Yonkers are subject to local income taxes, which can further affect the overall tax liability.
New Jersey Income Tax Brackets and Rates (2025)
| Taxable Income Range (Single Filers) | Tax Rate | Taxable Income Range (Married Filing Jointly) | Tax Rate |
|---|---|---|---|
| $0 – $20,000 | 1.40% | $0 – $20,000 | 1.40% |
| $20,000 – $35,000 | 1.75% | $20,000 – $50,000 | 1.75% |
| $35,000 – $40,000 | 3.50% | $50,000 – $70,000 | 2.45% |
| $40,000 – $75,000 | 5.52% | $70,000 – $80,000 | 3.50% |
| $75,000 – $500,000 | 6.37% | $80,000 – $150,000 | 5.525% |
| $500,000 – $1,000,000 | 8.97% | $150,000 – $500,000 | 6.37% |
| Over $1,000,000 | 10.75% | $500,000 – $1,000,000 | 8.97% |
| N/A | N/A | Over $1,000,000 | 10.75% |
New York Income Tax Brackets and Rates (2025)
| Taxable Income Range (Single Filers) | Tax Rate | Taxable Income Range (Married Filing Jointly) | Tax Rate |
|---|---|---|---|
| $0 – $8,500 | 4.00% | $0 – $17,150 | 4.00% |
| $8,500 – $11,700 | 4.50% | $17,150 – $23,600 | 4.50% |
| $11,700 – $13,900 | 5.25% | $23,600 – $27,900 | 5.25% |
| $13,900 – $80,650 | 5.50% | $27,900 – $161,550 | 5.50% |
| $80,650 – $215,400 | 6.00% | $161,550 – $323,200 | 6.00% |
| $215,400 – $1,077,550 | 6.85% | $323,200 – $2,155,350 | 6.85% |
| $1,077,550 – $5,000,000 | 9.65% | $2,155,350 – $5,000,000 | 9.65% |
| $5,000,000 – $25,000,000 | 10.30% | $5,000,000 – $25,000,000 | 10.30% |
| Over $25,000,000 | 10.90% | Over $25,000,000 | 10.90% |
Sales Tax
New Jersey imposes a statewide sales tax rate of 6.625% on most tangible personal property, specified digital products, and certain services, with specific exemptions such as unprepared food, clothing, and prescription medications.
In contrast, New York State has a base sales tax rate of 4%. Local jurisdictions can levy additional sales taxes, leading to varying total rates across the state. For instance, New York City applies a local sales tax of 4.5%. With a transportation tax of 0.375%, the produces a combined rate of 8.875% within the city. Additionally, certain items like clothing and footwear priced under $110 are exempt from sales tax in New York State, providing relief for consumers purchasing these goods.
Understanding these differences is beneficial for residents and businesses operating in either state, as the varying tax rates and exemptions can influence purchasing decisions and financial planning.
Property Taxes
Property taxes in New Jersey and New York differ notably in rates and regional variations. New Jersey has the highest average effective property tax rate in the United States, at 2.33% in 2024. This rate, combined with relatively high property values, results in substantial annual tax bills for homeowners. For instance, in Monmouth County, the median home value is $519,300 and the median annual property tax payment is approximately $9,830.
In comparison, New York’s statewide average effective property tax rate is 1.64%, placing it sixth highest nationally. However, rates vary significantly across counties. For example, Allegany County has an effective rate of 3.02%, but low median home values ($93,200). Meanwhile, Kings County (Staten Island) has a relatively low effective rate of 0.68% but a median home value of $865,300. These disparities highlight the importance of considering local tax rates when evaluating property tax burdens in New York.
Both states’ property taxes fund essential services such as education, public safety, and infrastructure. Given the substantial impact of property taxes on overall housing costs, prospective homeowners should assess these rates carefully when deciding where to live.
Death Taxes in New Jersey and New York
As of 2025, New Jersey and New York differ in their approaches to estate and inheritance taxes.
In New Jersey, the state eliminated its estate tax for individuals who passed away on or after January 1, 2018. However, the state continues to impose an inheritance tax, which is determined by the beneficiary’s relationship to the deceased. Immediate family members, such as spouses, children and parents (classified as Class A beneficiaries), are exempt from this tax.
Siblings and sons- or daughters-in-law (Class C beneficiaries) receive a $25,000 exemption, with amounts above this threshold taxed at rates ranging from 11% to 16%. More distant relatives and non-relatives (Class D beneficiaries) face tax rates of 15% to 16% on inherited assets.
Conversely, New York imposes an estate tax but does not levy an inheritance tax. For decedents passing away in 2025, estates valued over $7.16 million are subject to New York’s estate tax, with rates ranging from 3.06% to 16%. Notably, New York employs a “cliff” tax structure. If an estate’s value exceeds the exemption amount by more than 5%, the exemption is eliminated, and the estate is taxed on its full value.
Living in One State, Working in the Other
Commuters between New Jersey and New York must navigate specific tax obligations based on their residency and employment locations.
New Jersey Residents Working in New York
Individuals residing in New Jersey and employed in New York are required to file a non-resident tax return with New York State, reporting income earned within its borders. Simultaneously, they must file a resident tax return in New Jersey, declaring all worldwide income.
To prevent double taxation, New Jersey offers a credit for taxes paid to other jurisdictions, effectively offsetting the income tax paid to New York. Notably, these residents are generally exempt from New York City’s personal income tax, which applies only to city residents.
New York Residents Working in New Jersey
Conversely, New York residents earning income in New Jersey must file a non-resident tax return with New Jersey for the income sourced there. They also file a resident tax return in New York, reporting all global income. New York provides a credit for taxes paid to other states, mitigating the risk of double taxation. However, these residents remain liable for New York City’s income tax if they reside within the city limits.
Remote Work Considerations
The tax implications for remote work depend on various factors, including employer location and the nature of the remote arrangement. For instance, New York’s “convenience of the employer” rule may subject telecommuters to New York State taxes if their primary office is in New York, even when working remotely from another state.
Bottom Line
Tax policies in New Jersey and New York reflect different approaches to raising revenue, with each state applying unique combinations of income, property, sales and death taxes. The way these taxes interact can produce very different outcomes depending on income level, location and personal circumstances. For commuters, tax reciprocity and residency rules add another layer of complexity. While neither state offers a blanket advantage, understanding the specific tax structure in each can help clarify the trade-offs involved in living or working across state lines.
Tips for Financial Planning
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