This is not enough information to answer your question sufficiently. I will give you two perspectives.

Employee status subject to payroll withholding taxes: Although your employer's office is in New Jersey, the company may have to file New York income tax returns and withhold New York nonresident payroll taxes from your salary if the company has nexus in N.Y. It depends on the type of "contracts" you have in NY and whether or not the contracts are serviced from New Jersey or if employees are regularly coming into New York.

Independent subcontractor: You should consider the same questions about nexus discussed above. If you are conducting business in New York, you are subject to nonresident taxes on your self-employment business income allocated to New York. If you are working in New York City, you also have to file an unincorporated business tax return if you meet certain requirements for gross income or net profit.

I recommend that you meet with a tax professional. You can also get additional information on New York Department of Taxation website. Here is a link that may be helpful:

http://www.tax.ny.gov/bus/doingbus/starting_business.htm http://www.tax.ny.gov/pdf/2010/inc/it203i_2010.pdf (nonresident instructions - see page 20 - text copied below)

Business carried on in New York State Your business, trade, profession, or occupation (not including personal service as an employee) is carried on in New York State if you have, maintain, operate or occupy desk space, an office, a shop, a store, a warehouse, a factory, an agency or other place in New York State where you regularly carry on your affairs, or transact your business, with a fair measure of permanency and continuity. This definition is not exclusive. Business carried on both in and out of New York State If you carry on your business, trade, or profession both in and out of New York State, and you maintain accounts clearly reflecting income from the New York operations, enter the net profit or loss from business carried on in New York State. If the business’s books do not clearly reflect income from New York operations, you must allocate the income according to a prescribed formula or an approved alternative method. Complete Form IT-203-A, Nonresident Business Allocation Schedule, and attach it to Form IT-203. If you submit an alternative method for allocation, submit all information about your own method of allocation, along with Form IT-203-A (see the instructions for Form IT-203-A).