You are correct. This is the way how NJ figures tax for a part-year resident: they calculate what your tax would be on all of your income, and then tax you based on the amount of income earned there. You have the extra twist of the PA/NJ reciprocal agreement, but it does not really change the basic principle (and makes your taxes simpler for next year).
What happens is this: let's say your husband earned 60,000 overall, with 10,000 coming after he moved to NJ. NJ uses the 60,000 to determine how much tax they assess, and then they charge 1/6 of that amount (since 1/6 of your husband's income is earned in NJ). This is in essence what should be reflected. The amounts are not removed from the return, but you can be assured that NJ is not taxing the income he earned while he was a PA resident, but they do factor it in.
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