You are overlooking the fact that the other-state credit also reduces the property tax deduction that you can claim. You can't compare the full property tax deduction to the reduced property tax credit. I don't know how you did your calculations. You have to use Schedule NJ-COJ and Worksheet I on page 34 of the Form NJ-1040 instructions, or take a look at Schedule NJ-COJ and Worksheet I in TurboTax.
