unless you want to take your case to SCOTUS - very costly - you pay for your lawyers - so read the paragraph in bold type below
note that this decision was handed down in 2015.
The Supreme Court’s decision in Wynne affects not only Maryland; it also has ramifications for all states that limit the amount of the resident credit for taxes paid to other states.
Although Wynne invalidates only Maryland’s refusal to grant credit for taxes paid to other states, it raises a question: Are the other limitations that states place on the computation of their resident credit similarly invalid?
Many states limit the resident credit to a percentage computed by dividing the income taxed in the other state by the income that would be taxed as if the taxpayer were a resident, times the tax that would be due if the taxpayer were a resident. This could cause taxpayer residents in a state with a low tax rate to be put at a disadvantage if they have income that is taxable in a state with a higher tax rate.
without a ruling that would affect them, I doubt any other state has changed its laws to conform to the above decision. I've worked with the tax programs for many states but not MD. the comps go something like what MD use to use.
so as its stands now you file a resident NJ return and a nonresident NY return. on NY you only report the income earned while working in that state. NJ will give you some credit for the taxes you paid to NY. it might be that the credit is the full amount of taxes paid to NY.
