| “Will that effect my current pay?”---->I guess there is no reciprocal state income tax agreement between NJ aand NYC. So, you currently, as a NON-Resident of NYC, need to pay tax on your NYS(New York City charges a personal income tax to City residents. The tax is administered and collected by the New York State) source to NYS( and NYC) and claim state income tax paid to NYS on your NJ state income tax return. If you move to NYC during the year 2011, then you will probably have to file your NYTS return as a part year resident of NYC and you also will have to file your NJ return as a part year resident of NJ. You can, then , claim the state income taxes( including city and local taxes) paid to both NYS and NJ on your 1040 Sch A line 5 as an itemized deduction.
“ Right now, NY taxes are taken out of my paycheck but I'm not sure if my residence changes if that will effect anything.”---->As said above, you need to pay taxes on your NYC source income to NYS and you can claim tax credit on your NJ return as a full year resident of NJ. Then when you change your residence to NYC from NJ, then file your state taxes to both NJ and NYS as a part year resident of NJ and NYS as said above.
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