File a resident New York return and a nonresident New Jersey return.
Your wages are taxable to NJ because you work in Jersey. It's also taxed by NY because you live in New York City.
NY will give you a credit for tax paid to NJ. If you prepare the NJ return first, the numbers will transfer over to NY.
Thank you for answering, but how does that apply to the software? Do I run through the full process twice? One for new york as a resident, and then another time for NJ as a non resident, omitting the info that doesn't apply for either?
Yes, you would have to go through the process of completing two state returns. You should complete the nonresident New Jersey return first, followed by the New York resident return. It is important to complete your taxes in that order because New York will give you a credit of taxes paid to New Jersey for the money earned in New Jersey. Completing the returns in that order will ensure the calculations are correct.
You would omit the information that does not pertain to New Jersey on the nonresident return. However, everything applies to New York as it is your resident state, and you will be taxed on all of your income.