Benefits of Living in NJ While Working in NYC

Reviewed by Pamela RodriguezFact checked by Vikki VelasquezReviewed by Pamela RodriguezFact checked by Vikki Velasquez

Many people who work in New York City live across the river in New Jersey. There are reasons for this, including relatively affordable housing, reliable transportation options into Manhattan, and avoidance of an income tax on city residents.

Read below to learn more about the reasons why commuters might choose to settle in New Jersey.

Key Takeaways

• In terms of real estate, New York City is one of the most expensive cities in the world.
• Some cities and towns in New Jersey are more affordable, although you need to factor in the costs of commuting.
• It’s often a choice between city and suburb. New Jersey has many small towns with small-town amenities and suburban-sized homes.

Housing Is Cheaper

New York City has some of the highest housing costs in the country. As of May 2024, the average value of a residential home has risen to $1,140,709—a 6.1% decrease from 2023 levels. That’s not the price of a house. It’s a smallish apartment.

In New Jersey, the average cost is less than half that, at $522,643, although prices rose 9.8% over the past year.

You can get more house or apartment for a much lower price by heading to New Jersey, according to those figures.

You Can Take a Train to Work

It might seem odd to commute to work from another state, but if you live in the northern or north-central portions of New Jersey, work is 30 minutes to an hour away. You can take a ferry across the Hudson River from riverside towns like Hoboken and Weehawken, take a train into midtown’s Penn Station, or a bus into the Port Authority Bus Terminal.

If you would prefer to drive into the city, you may be looking at commute times of an hour to two hours or more. And that’s when things are going smoothly.

Granted, you could spend nearly that long on subways and buses getting to work from Queens or Brooklyn.

Important

A plan to impose a $15 toll on drivers entering Manhattan was put on hold indefinitely by Governor Kathy Hochul in June 2024. The plan had been aimed at reducing traffic congestion but the governor declared it to be too much of a burden on workers and businesses.

It’s Easier to Have a Car

Having a car in New York City is expensive. Just parking your car in a municipal garage costs a minimum of $500 per month.

In any case, using a car to commute to work is more than daunting, given the heavy traffic and the scarcity of on-street parking.

Most of New Jersey is much easier on drivers. You can park your car in your driveway or apartment parking lot for free, head to the grocery store, or take the kids to baseball practice.

Lower Taxes

New York City has its own income tax, on top of the state income tax. The city lowest tax rate is 3.078%, and it goes up to 3.876% if you earn more than $50,000 per year.

State taxes are relatively high in both New Jersey and New York. The New York state tax starts at 4% and goes as high as 10.90%, while in New Jersey rates start at 1.4% but go as high as 10.75% if you make more than $1,000,000. 

Notably, sales tax in New York City is 8.875%, while in New Jersey the statewide retail sales tax is 6.625%.

Plenty of Scenery

New York City has Central Park, the Bronx Zoo, the Brooklyn Botanical Garden, and plenty of other attractions, but New Jersey has a diverse portfolio of beautiful places as well.

Granted, New Jersey has some heavily industrialized areas that aren’t so scenic. But with 127 miles of ocean coastline, plenty of scenic driving routes, state parks with hiking trails, and a stunning view of New York City from across the Hudson River, there’s a lot of beauty in New Jersey.

Is It Cheaper to Live in New Jersey or New York?

Most cost of living points—housing, food, taxes, and most utilities—are cheaper in New Jersey than in New York City. Factor in commuting costs in your decision.

Is Income Tax Higher in New Jersey or New York?

Income taxes are higher in New York City than in New Jersey. Even though New York’s state income tax rate isn’t much higher than New Jersey’s (New York state income taxes range from 4% to 10.90%; New Jersey’s range from 1.4% to 10.75%), New York City comes out higher, as the city levies a city income tax that ranges between 3.078% and 3.876%.

Do You Pay Double Taxes If You Work in New York and Live in New Jersey?

In general, you do not pay double taxes if you work in New York City and live in New Jersey. While you are required to file a non-resident tax return in New York and also a resident tax return in New Jersey, you will receive a New Jersey tax credit for, generally, the same amount you paid in New York taxes. As a New Jersey resident, you are also exempt, in most cases, from paying New York City income tax.

The Bottom Line

Commuting to New Jersey is something to consider if you want to pay less for housing and have more space. The state itself offers a lot of natural beauty as well as smaller and less crowded cities and towns.

Like other states, there are downsides to living in New Jersey—the cost of commuting and higher property taxes—but New York’s neighboring state has a lot to offer.

Read the original article on Investopedia.