Since the employer took out NY wages, you will be filing a NY non-resident return. If the income is NY sourced, then you would pay taxes on the NY income. That amount withheld versus the tax liability, it could go balance due or refund.
You want to do NY first. Your resident state taxes all income but gives a credit for income taxed by another state. This does increase any refund.
You will need to prepare the states in a special order. You may need to delete both states and begin again.
- First, prepare your non-resident NY return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
- THEN prepare your resident state return and it will generate a credit for your income already being taxed in the non-resident state.
- The credit will be the lower of the state tax liabilities on the same income. You may owe your resident 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.
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