You will need to file a part year return for each state. States tax all income earned while a resident. The w2 federal wages section should be entered to match the W2 The state wages section should not. Since all of your income was earned in NY, the NY section is correct, enter it as such. For NJ, enter only the amount that would be taxable to them. This can be tricky since they tax any money saved in a retirement plan as pre-tax dollars in NY.
Do your NJ return and calculate the credit. Then do your NY return and indicate that some of the wages have already been taxed by another 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.
If you need to locate your NJ tax liability, follow these steps:
- To locate your tax liability for NJ
- Log into your return
- Select state taxes
- Enter NJ for which you need the liability
- On the left, go to Tax Tools
- Select Tools
- Select View Tax Summary
- You will see Summary of your "NJ" Return at the top.
- Locate the line that says Total Tax
- Write that number down.
- Return to your NY return and enter that number where it asks for the liability for NJ
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