New Jersey Retroactively Adopts “Convenience of the Employer” Rule for Withholding

On July 21, 2023, the New Jersey legislature enacted AB 4694 (P.L.2023, c.125) (NJ AB 4694) to adopt a “convenience of the employer” sourcing rule for nonresident employee wages, but only for states that maintain the same “convenience of the employer” rule. 

New Jersey employers with remote employees working from Delaware, Nebraska or New York should communicate this change to affected employees, and review and adjust 2023 state income tax withholding so that New Jersey is the primary state. 

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