The forms are for the company to report to the state and federal what they believe to be true. This is your chance to get it right. You will have paystubs with dates. A bonus or multiple bonuses can be different. Perhaps you had $4m in bonuses while working in NJ and the rest while working in NY?
The total of the bonuses needs to add to the correct number.
- If the bonus was $4 NJ + $6 NY then the state lines need to be corrected so your W2 state boxes can correctly reflect it.
- If the bonus was actually $10 NY only, then NJ should not have a number in your W2 forms since NJ is your resident state and will tax it all anyway. The NJ state line can be left blank.
Federal tax on $10M, yes.
NY taxes on what was actually received in NY, if $10M, yes
NJ taxes on $10M since that was the total bonus
NJ gives credit for lower of NJ or NY on the income.
See State of NJ - Department of the Treasury - Division of Taxation ...
Your resident state taxes all income but gives a credit for income taxed by another state. Please carefully follow these directions.
You will need to prepare the states in a special order. You may need to delete both states and begin again.
- First, prepare your non-resident NY return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
- THEN prepare your resident state NJ return and it will generate a credit for your income already being taxed in the non-resident state.
- The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.
It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.
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