I live in NJ. I worked most of the year in NJ, but worked 2 months in NYC. My taxable income for NY includes both my NY and NJ income. This Correct?

[capnbobl1011]

No, that's not correct. If you live in New Jersey and worked in New York for only two months, your New York taxable income should include only the income you earned while working in New York. New Jersey, as your state of residence, taxes all your income, including what you earned in New York. However, New Jersey provides a credit for the taxes you paid to New York on the income earned there, to avoid double taxation.

To ensure accuracy, you should file a **New York nonresident tax return** to report the income earned in New York and a **New Jersey resident tax return** to report all your income. Be sure to calculate the credit for taxes paid to New York when filing your New Jersey return.

If you're using tax software or working with a tax professional, they can help you allocate your income correctly and claim the appropriate credits. Let me know if you'd like more guidance!

[SusanY1 · Accepted solution]

This does sound correct.  New York uses all of your income (earned in all states) to determine your tax bracket and tax, and then apportions out the percentage of the tax attributed to your NY state income, rather than parsing out the income itself.

For example, if you earn $80,000 in NJ and $20,000 in NY you'll see $100,000 as your income on the state return, but you won't see the same tax as someone who earned $100,000 in New York. 

If the NY tax on $100,000 would then be $5,000, you'd be charged only $1,000 or 20% of that tax, because only 20% of your income was earned in NY.  
 

[ggiolli]

Wow, thanks for the fast response.   Your answer forced me to go back and look at the Summary.  I am now noticing a New York Income Factor... which eliminates the non NY income.    Thanks again for the very clear answer.

[ggiolli]

Thanks Susan!   Yes, went back to the NY Summary page, and found a New York Factor they were applying.  All good now.  Thanks!