How to compute double taxed income while a resident of New Jersey?

[hero123]

Hi

I have to file two states, New York and New Jersey. I have moved from New York to New Jersey.

How do I compute the double taxed income? Do I take the federal's 'Income and Adjustments' of $X or federal's taxable income of $X - $25 100. Then substract it with our total W2 income.

please advise

L

[ErnieS0]

It depends on whether you still worked in New York after you moved to New Jersey.

If you moved to New Jersey and got a job in NJ, then you have no double taxed income. All your New York income goes on the NY part-year return and all your New Jersey income goes on your part-year NJ return.

If you moved to New Jersey and continued to work in New York (either physically or in some cases, remotely), then your double taxed income will be the amount of NY income you earned while living in NJ.

Use income and tax from your NY tax return to calculate the credit for New York tax on your New Jersey tax return.

Find the percentage of NY income earned in NJ and multiply that percentage by the total tax on your NY tax return. For example, if you earned 50% of your NY income while living in NJ, then you can claim a credit for up to 50% of NY tax.

[hero123]

I think your answer is not so accurate.

On that page, there is a note saying 'Do not enter the income amount and taxes withheld from your W-2. We need the actual numbers from your other state's tax return'.

Please see the attachment 'tax1.png'

From 'tax2.png and tax3.png', where do I get the two numbers from tax1.png?

[DanielV01]

It can be a bit of a computation in your case.  If you moved from NJ to NYC with a job in NYC, you were a NY Nonresident and a NY Part-year resident.  While all of your income is taxable in New York State, only the income that is "NYC resident income" is taxable to New York City.  

Given what you've posted above, use the following technique to determine the New York tax that qualifies for the "double-taxed income" credit in New Jersey:

1.  First, reconcile the city taxes, which is the city tax withheld minus city tax computed minus city tax credit (the $495 you see).  If that results in a negative, this is how much tax you owe for the NYC portion.  Subtract that number from the city taxes again (if a negative, then this will add to the tax withheld).  This will determine how much of the overall state tax is actually city tax.  Subtract this city tax figure from the "Allocated NYS tax".  This is the base "NY State" tax figure.
2. Now, prorate the New York State tax to determine the "nonresident" portion.  Multiply the amount of New York nonresident income by the total overall income.  Multiply that percentage by your result on point one.  That result is what is the tax on the double-taxed income, which is the income that is being taxed by both New Jersey and New York.  

[hero123]

Hi Daniel

I am a bit confused in point (1). I will attach an example. I cant get the numbers. Btw: I moved from NYC to NJ while still having NYC job.