Both of you do need to make sure indicate you each lived in NY all year long on the Personal Info page...you never "move" out of NY . (your mailing address in NC can be NC..that does't set the "resident" state)
1) IF she filed the proper forms with the employer...and had no NC taxes withheld on her job income, then she/you wouldn't file NC taxes at all. Her W-2 would then likely not show any NC withholding. IF this is your situation, go to the Personal Info page and take out NC at the bottom of that page as an "other" state that one of you worked in...then go to the state section and delete the NC tax forms entirely. (desktop users may have to go up to the "File" menu to find the state removal selection)
2) If, however, NC taxes were withheld, then the NC non-resident form is needed, but when you finish the Federal part, and start in on the NC-Non-resident tax return, there is a place where you tag all W-2 forms as "Not NC-Source Income" to remove all W-2 forms as being NC taxable. All other boxes/allocations during the followup pages you need to put a zero in every box (exceptions below)
(and she needs to stop that NC withholding, and give the employer a NC-4EZ indicating NY residency so that NC withholding stops.
https://www.ncdor.gov/documents/employees-withholding-allowance-certificate-nc-4ez )
____________________________
Exceptions:
a) If the Military person works an off-duty W-2 civilian job...that W-2 income is NC taxable as an Non-resident....
b) IF either spouse works a Contractor / Cash / 1099-MISC / Self-employment job while in NC, then that income is also taxable in NC as a nonresident.
c) IF either or both of you own a rental property located in NC that you receive income from...then that income is taxable by NC as a non-resident.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
