Yes, the total annual wages will be reported on your W-2 for both NY and NJ but this doesn't mean you will pay state income taxes to each state based on this total amount. Instead, you will allocate the income on your part-year returns for both NY and NJ based on your days of work in each state. Each state will recognize that you were a part-year resident even though your total wages are being reported on your W-2 for that state.
So for
state tax purposes, you will need to divide up your wages based on the time you
were a part-year resident of each state. If your employer only withheld taxes
from one state, you may owe taxes in the state for which no state withholdings
were taken out but you may get a refund in the state where extra withholdings
were taken out.
NY taxes all the
income reported when calculating NY state income taxes (whether resident,
part-year resident or nonresident) but you will only be required to paid a
portion of the total NY state income taxes calculated (your percentage of the
total NY tax that relates to your NY source income only)
Each state has a
different ways of calculating state income taxes.
The way that the NY state income tax return works is
that NY looks at all of your income from all sources and generates a total
NY state income tax on all income. When NY is determining the actual NY
state income taxes that you owe, NY multiples the total NY taxes on all income
by the percentage of NY source income over all source income. So if all your
income is $10,000 but NY source income is $8,000, NY will calculate the NY
state income tax on $10,000 then multiply this total tax by your NY source
income over total income ($8,000/$10,000) to get your percentage of NY state
income taxes on your NY source income. So in this instance, your NY state
income tax liability would be 80% of the total amount of NY taxes generated (on
all income). That is why all your income is being reported on your NY
state tax return.
You can preview your
NY Tax summary to see what portion of the total taxes for NY you are actually
paying.
To preview NY Tax
Summary:
- TurboTax Online sign-in,
click Here
- Under Tax Timeline, click on
Take me to my return
- Go to "My Account"
> "Tools"
- Under the Tools Center,
select "view tax summary"
- Select "NY Tax
Summary"
Check below for more
information about filing a part-year state tax return (Please select "see
entire answer" to see full answer)
https://ttlc.intuit.com/replies/3302008
