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Does the taxable income from 1099-NEC apply to multiple states?

I work in New York and live in New Jersey. I had multiple jobs last year one was in New York and one in New Jersey.

I also did some consulting work in New York for which I have received 1099-NEC.

I have filled both states on TurboTax - New York and New Jersey.

However, I am seeing the amount as Taxable Amount under Business Summary for both the states.

Do I need to subtract/remove that amount from New Jersey? 

For my other jobs, I had a W2 TurboTax gives an option to not get taxed twice. But it does not happen automatically for 1099-NEC. 

 

Thanks.

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1 Best answer

Accepted Solutions
MayaD
Expert Alumni

Does the taxable income from 1099-NEC apply to multiple states?

No, don't remove that amount from NJ return. 

As a NY nonresident, you only pay tax on New York source income, which includes earnings from work performed in New York State, and income from real property located in the state.

 

That income is also taxable on your NJ income tax return. Individuals who are resident and ordinarily resident in Jersey are liable to Jersey income tax on their worldwide income.

However, you can clain on your NJ return credit paid to another state. When calculating a credit for taxes paid to New York, you should only use the income actually taxed by New York in the calculation.

 

For accurate calculation, always prepare the non-resident return first. 

How do I file a nonresident state return?

 

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1 Reply
MayaD
Expert Alumni

Does the taxable income from 1099-NEC apply to multiple states?

No, don't remove that amount from NJ return. 

As a NY nonresident, you only pay tax on New York source income, which includes earnings from work performed in New York State, and income from real property located in the state.

 

That income is also taxable on your NJ income tax return. Individuals who are resident and ordinarily resident in Jersey are liable to Jersey income tax on their worldwide income.

However, you can clain on your NJ return credit paid to another state. When calculating a credit for taxes paid to New York, you should only use the income actually taxed by New York in the calculation.

 

For accurate calculation, always prepare the non-resident return first. 

How do I file a nonresident state return?

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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