Yes, you would pay NY based on the different tax rate and income calculations. NJ taxes retirement income while NY does not- so there may be a difference in income for the 2 states.
- The key is to input the nonresident NJ return and let the program figure out the NJ tax liability.
- Then the program can use the income being double taxed to create a credit.
- The credit will be the lower of the state tax liabilities on the same taxable income. You may owe your resident state, if they have a higher tax rate along with differences in how the taxable income is calculated.
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