I work in NY and live in NJ. My NJ property tax is $10k but TurboTax is choosing $50 credit for me instead. Is the NJ tax credit to NY making my liability to NJ zero?

[np07310]

This seems like an error on the software.  Please advise.  Another thread I found on a similar topic here:

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/my-nj-tax-return-not-picking-pro...

[SweetieJean]

NJ gives you the higher of a property tax deduction OR the $50 property tax credit.  There are special calculations if you claim credit for taxes paid to another jurisdiction.  See  Schedule NJ-COJ and Worksheets H and I ("eye") in this instruction booklet:

Instructions for the 2020 NJ-1040 (state.nj.us)

Also note that you could end up switching back and forth between the deduction and credit from year to year, depending upon that year's particular tax situation.

[np07310]

Thank you for your prompt reply.  I'm not sure how to deal with the NJ-COJ since I just follow Turbotax online steps and already removed NJ state income when prompted.  I didn't have to do anything manual.  Do you think this could affect/invalidate my NJ property tax deduction somehow?  And how would you suggest  I fix this on Turbotax online?

[ErnieS0]

TurboTax will automatically create NJ-COJ and Worksheets H and I and compute whether the property tax deduction or credit is better for you based on the rules provided by the New Jersey Division of Taxation.

I’m not what you mean when you say you removed NJ state income when prompted. There is a screen where TurboTax will ask you to remove either NJ and NY income if both are listed on your W-2. You should remove NY income and keep NJ.

If you kept NY this may change your property tax deduction/credit calculation and also prompt a notice from the Division of Taxation because NJ will be looking for the NJ amount on Form NJ-1040, not the NY amount.

Delete NJ to clear your state return. If you paid, Start Over. After you delete NJ, click Add Another State and put NJ back in and go through the screens.

if you need Live tax Help, schedule a call with a tax expert. They can walk you through your questions and show you how to get a line-by-line review, if you want.

[np07310]

Thank you!  I read on a different thread that I should've removed NJ wages, but I see now that it is incorrect.  Might be helpful if you could remove this thread (I know there is a correction further down in the post but the best answer chosen was incorrect):

https://ttlc.intuit.com/community/state-taxes/discussion/live-in-nj-work-in-nyc-remove-duplicate-wag...