NJ is not taxing
both your income and your wife's income. It just looks like it is.
NJ will calculate
what your tax would be on all your income as if you were a resident. Then
they will prorate the amount
of NJ tax to the percentage of
income you actually earn in NJ.
So if your income from all sources is $10,000 but
your NJ source income is $8,000, NJ will calculate the NJ state tax on $10,000
then multiply the total state taxes generated by 80% ($8,000/$10,000). So even
though you all your income is being reported on your NJ state tax return,
you are only being taxed on the NJ source portion of your total income.