You live in NJ so you must always file a resident return where you live. Some states allow you to work in the state and have a reciprocal agreement with a neighbor so no tax return is required. NY wants a tax return plus there are city returns in NY and you may have to pay that as well. TX has no tax and nothing is required.
You need to prepare the NY return first. If you worked in NYC or Yonkers, that is part of the NY state return.
Once you have your NY liability, then you can fill out your NJ return. NJ will give you a credit.
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.
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