topic Wife NY Resident working in NJ - Help! in State tax filing

Wife NY Resident working in NJ - Help!

ltra922 — Sat, 15 Feb 2025 12:36:13 GMT

Something not working like it did last year and I think I know why but before I re-do it wanted some advice.
We live in NY and my wife works in NJ. Her company gave her 3 W2s. One with NY, one with NJ and one with a what appears to be a combined amount?? I tried using the combined one but that has me owing thousands to NJ. I then proceeded to the state filing section and for my free state, I chose NJ and then purchased NY. (Not sure why it did it that way) but now it shows me owing $1500 to NJ but NY is crediting me Around $1500.

I think it’s right but last year I remember not owing NJ and not having to send them anything but only had to pay Ny a few dollars.
is it because I should have had NY as my first free state then do NJ?

Re: Wife NY Resident working in NJ - Help!

AmyC — Sat, 15 Feb 2025 16:12:28 GMT

Yes, you would pay NY based on the different tax rate and income calculations. NJ taxes retirement income while NY does not- so there may be a difference in income for the 2 states.

The key is to input the nonresident NJ return and let the program figure out the NJ tax liability.
Then the program can use the income being double taxed to create a credit.
The credit will be the lower of the state tax liabilities on the same taxable income. You may owe your resident state, if they have a higher tax rate along with differences in how the taxable income is calculated.

Re: Wife NY Resident working in NJ - Help!

ltra922 — Sun, 16 Feb 2025 13:22:05 GMT

Ahh ok. I think I got it.

What is throwing me off though is I checked last years w2 input and it seems it only had the NJ data entered. When I import it it has both (which total to the same total state tax).
I’ve tried it both ways and it keeps saying I have to send NJ 1500 and NY will send me 1500. I still think it’s wrong somewhere and the credit is not being applied.

I’m going to start from scratch and not import as I think that is throwing it off. Does that make sense?

Re: Wife NY Resident working in NJ - Help!

TomD8 — Sun, 16 Feb 2025 15:19:52 GMT

In TurboTax, you must complete the non-resident state tax return first, before you do your home state return, in order for the program to correctly calculate and apply the "other state" credit.

That's because the credit is granted by your resident state. The program doesn't "know" the amount of the credit unless you finish the non-resident state return first.

Re: Wife NY Resident working in NJ - Help!

ltra922 — Sun, 16 Feb 2025 16:57:05 GMT

Thanks Tom

i started NJ first and it brought me to a point where its asking me to remove wages from either NY or NJ. I take it I remove NY?

Re: Wife NY Resident working in NJ - Help!

Vanessa A — Sun, 16 Feb 2025 17:08:57 GMT

Yes, if you are working on the NJ non resident return, then you would remove wages earned in NY.