I am a NJ resident and I have a rental property in Poland. I already reported the foreign rental income on my federal return (Schedule E) and claimed foreign tax credit (Form 1116) for the taxes paid to Poland's IRS.
When I am doing NJ state return, TurboTax does not make it clear whether I should also include this on my NJ state return or not. TT is asking this: "Is any of your rental income not subject to New Jersey tax? For example, it occurred during the period when you were not a resident of New Jersey and is not New Jersey source income."
So YES, it occurred during my residency in NJ, but NO, it's not a New Jersey source income.
So my question is: Do I also have to report this foreign rental income on my NJ state return?
It seems a little unfair to do it again, especially that NJ does not allow to take foreign tax credit: "No credit is permitted for taxes paid to the US Gov, Canada, Puerto Rico or any foreign country or territory".
On the other hand: "(...) if you are considered a New Jersey resident for tax purposes, you are subject to tax on income from all sources (worldwide income), regardless of where you are living".
Can someone give me a clear response whether or not NJ state taxes residents on foreign rental income?
