<prompt> Human: I live in Jersey City, NJ and workmake all of my income in New York City. Today I got a letter in the mail saying that I owe the State of New Jersey backed taxes for the three years Ive lived there and havent paid income tax. Since Im already paying NYC city tax and NY state tax, do i owe NJ money or do I have grounds to fight this?  <response>: If you live in NJ, you werent supposed to pay the city tax its only for NYC residents. You might owe NJ money since you should have filed a resident return for NJ and a non-resident return for NY. The way the taxes break down is that NY gets to tax all income you made in NY while NJ gets to tax all income you made everywhere since you are a resident. NJ then credits you based on taxes you paid to other jurisdictions. For most tax brackets, the taxes in NY are higher so youd have no net taxes in NJ; however, you were supposed to inform NJ that you already paid taxes to NY in order to get the tax credit which it seems like you didnt?. Im foggier on how the penalties would work because now the income taxes werent covered by tax credits for the last 3 years and theyve probably accrued more penalties... 