Beginning in 2020, you have no taxable earnings in New York (NY) State . In other words you did not physically work inside of NY at all in 2020 based on your comments above. All income should be taxed to New Jersey (NJ), where you live and worked from. Do not include any W-2 earnings on the NY return.
New York City may be a different matter. I can provide the link for their site, but will not have specifics for those rules. NY City Taxes
The unemployment tax was paid and filed with NY because that is where you employer was situated geographically and they may not have been required to register as a NJ employer.
For the unemployment you received from NY sources as a nonresident follow these instructions.
- New York State amount column: Enter that part of the federal amount that represents taxable unemployment compensation received as a nonresident resulting from employment in New York State. If the unemployment compensation received from New York State sources is based on wage or salary income earned partly in and partly out of New York State, determine the amount allocable to New York State in the same manner as the wage and salary income on which it is based.
- Instructions for NY Form IT-203
When you file the nonresident return for NY, enter the amount that should be taxed to NY in the state interview. There will be a screen after selecting your nonresident status to allocate the appropriate income. Be sure to complete the NY return first, then do your resident return for NJ.
Your resident state will allow a credit for taxes paid to another state on the same income. All unemployment income will be taxed to NJ because as your resident state they will require all worldwide income to be reported. The credit will be the lesser of the amount of tax liability actually charged by NY or the tax that NJ would charge on the same income.
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