I+my wife both live in NJ, and work in NY.
In our W-2 forms the box 17 is populated for NY only for total about 12k, and is empty for NJ. Basically I read it as we paid about 12k of income tax to NY, and paid nothing to NJ.
Now, after completing everything in TurboTax I have the following result:
I owe about 1k to Federals - OK.
I owe about 10k to NY.
NJ owes me about 9k.
Hence I owe about 2k in total.
I'm fine with the total result, but I'm completelly confused with the logic of these calculations. And I feel somewhere I made a mistake, most likely in the place where I was asked to remove duplicate incomes on the state level.
Why do we owe NY this much, as per our W-2 we have paid all or almost all income tax to NY?
Why NJ owes us anything - it didn't get a penny of our taxes?
I realize there is such thing as "tax credit", but I'm totally confused on how it works. Can someone explain, if the result I got is expected, or I have to re-verify it?
