Thank you for this detailed walkthrough. I went through it all and encountered the following two issues:
1) At the following step: "Now go back and edit the NJ return. Click the Update button for Taxes and Credits. Go through the Property Tax Deduction or Credit again to get back to Credit for Taxes Paid to Another State. This time click Work on Credit. When you get to the screen that asks for "Double-taxed income while a resident of New Jersey," enter the New York adjusted gross income from Form IT-203 line 31 in the New York State amount column (the second column). For "Tax paid to New York," enter the total New York State taxes from Form IT-203 line 50."
The amount from IT-203 line 31 is my NY AGI, but the interview question is looking for the double-taxed income *while a resident of NJ*. So I believe the amount I need there is not what is in IT-203 line 31, but rather the full year W2 wage income, prorated for the % of the year I lived in NJ. That is the only double taxed income for NJ purposes. Also the NJ-COJ form to calculate the NJ credit states that the amount you enter for this box cannot exceed your NJ income from the NJ-1040 line 29.
2) The mortgage interest deduction is turning into a real challenge due to the move. I had a house/mortgage in NY from 1/1/19-10/4/19, and a house/mortgage in NJ from 8/9/19-12/31/19. The actual date of the move was 9/27/19, so all my income proration is based on that date. The NY house had a mortgage principal balance of ~$350k until it was paid off on 10/4, and the new NJ mortgage has a principal balance of $1,120,000 (above both the new federal 750k deduction limit and NY's 1mm limit).
First question - when I calculate the federal mortgage interest deduction, can I take the deduction on both mortgages during the overlapping period? I owned both houses but obviously only lived in one at a time.
Second question - How does the part-year calculation work for the NY state returns? Do I prorate for the period of time I lived in that state? For NY that means I would have 1 mortgage through 8/9/19 and then two mortgages from 8/9/19 - 9/27/19 when I physically moved. And then wouldn't the second mortgage from 8/9-9/27 be limited to NY's $1mm mortgage principal limit?
I see that NJ doesn't have mortgage interest deductions so I guess it is moot for that return.
