Benefits of Living in NJ While Working in NYC

By Tim Parker
Updated June 22, 2024
Reviewed by Pamela Rodriguez
Fact checked by
Vikki Velasquez
Vikkie Velasquez
Fact checked by Vikki Velasquez
Full Bio
Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues and has also revised and edited educational materials for the Greater Richmond area.
Learn about our editorial policies
George Washington Bridge, NYC, rush hour, panorama aerial view from helicopter.

 

dszc / Getty Images

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.

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.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Zillow. "New York (Manhattan) Home Values."

  2. Zillow. "New Jersey Home Values."

  3. Office of the Governor of New York State. "What They Are Saying: Governor Hochul Announces Pause on Congestion Pricing to Address the Rising Cost of Living in New York City."

  4. New York City, Department of Transportation. "Motorists & Parking: Municipal Parking Facilities."

  5. New York City, Department of Finance. "Instructions for Form IT-201 Full-Year Resident Income Tax Return."

  6. The Tax Foundation. "State Individual Income Tax Rates and Brackets for 2024."

  7. New Jersey Treasury, Division of Taxation. "Sales and Use Tax."

  8. New York City, Department of Finance. "New York State Sales and Use Tax."

Open a New Bank Account
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.