If you live in NJ (or anywhere) and work in NYC, you have to pay NYC city tax--everyone who works in NYC will pay it, regardless of where they live. (Of course you will also pay it if you live in NYC too.)
If you live in NYC and work in NJ, you should only have to pay NY state and NYC city tax. If both NJ and NY tax are withheld you will get a credit for NJ tax withheld on your NY state tax at the end of the year.
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