You get credit for the lower state tax on the lowest taxable amount.
- Each state calculates taxable income differently.
- Each state has its own tax rate/ system.
- You get the lowest of both categories as a tax credit.
Ernie notes your NJ tax amount, is that what is showing on the NY credit form to use for the computation? It sounds like a larger number is in there, like maybe withholdings instead of actual tax liability. Please double check your entry for the NJ liability to NY.
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