I’m not fully understanding what you mean by, “There was a period of time last year where she lived in NY.” In 2022, were you a full-year New Jersey resident, and was she a part-year NJ resident?
Or did she live in New York while remaining a NJ resident? New York has a statutory resident rule. NY considers you to be a resident if you maintain a permanent place of abode in New York State for substantially all of the taxable year and spend 184 days or more in New York State.
See Domicile.
If she was a part-year resident, you will have to file a NJ part-year resident and a NJ part-year nonresident return. NJ requires the same filing status as federal unless one spouse was a full-year nonresident. If you file together for federal, you’d have to file a resident and nonresident return.
If you file separate federal returns, you can file a full-year resident return and she will file two part-year NJ returns.
As for your credit being higher last year, if you both lived in NJ for all of 2021 and she worked in NJ, then all her NY income was would be taxed on the NJ return.
In 2022, your credit would be lower if she lived and worked in NY for part of the year. There would be a period of no double-taxed income.
If you both lived in NJ all year, I don’t understand why she has split wages since all her NY income would still be taxable to NJ as a NJ resident.
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