State tax filing
You answered correctly. When you are in the New York (NY) state return interview you will be asked about income allocation. The following questions refer to business income.
- If you see the following question answer No- 'Did you allocate your income to NY based on volume of business transacted?'
- And again to the question 'Do you need to fill out the Nonresident Business Allocation Schedule to allocate New York State business income?'
- See the images below for assistance. If any deductions need to be allocated you would enter the NY portion as well (not likely).
New Jersey (NJ) will give you credit for taxed paid to another state on the same income. The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income. As the resident state all worldwide income must be included.
The credit for tax paid to another state on the same income will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
