The TurboTax program is correctly deducting your real estate taxes on your nonresident NY return and your resident NJ return. It is not considered double dipping. On your IT-203, you can see that NY allows the itemized deduction for nonresidents on Line 33. This amount flows from the Form IT-196, which includes the deduction for property tax and mortgage interest. You can deduct these amounts for your one property located in NJ.
Your total itemized deductions help determine your NY taxable income. This amount is then used to calculate your base tax. That base tax is then adjusted (or prorated) based on your income percentage of income earned in NY versus your total income. The calculation formula is written below for further clarification. If you have any further questions, please respond in the thread and we can assist you further.
CALCULATION:
Federal Adjusted Gross Income
Less: Standard or Itemized Deduction
=New York Taxable Income
Less: Credits
=Amount used to calculate base tax (A)
Income percentage = NY AGI/Federal AGI = NY Income percentage (B)
Base tax (A) * income percentage (B) = Allocated NYS Tax
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