Left NJ - Foreign Income on NJ Tax Return

[Anonymous]

Hi,

I am a greencard holder and returned back to the UK permanently on July 20th 2022. I lived in and was a resident of NJ.

My UK salary from Aug 1st needs to be taken into account because I have yet to formally abandon my GC but I can claim a foreign tax credit for my Federal taxes.

However currently my NJ return is taxing all my UK income and there appears to be no way to receive a credit, is that correct?

Looking online has sent me in circles.

Can I also complete a NJ non-resident return for everything post July and somehow not have my UK earnings considered?

Seems very unfair that my UK salary is being taxed by the state of NJ when I am no longer a resident there.

Answers greatly appreciated!

[MarilynG1 · Accepted solution]

If you claimed the Foreign Income Exclusion and the Foreign Tax Credit on your Federal return, this reduces your Federal Income Amount (and most likely excludes all your UK income). 

If you are filing a Part Year Resident return to New Jersey, your Federal Income Amount carries over to your NJ return as a starting point (which is probably only your NJ income). 

NJ will only tax you based on the % of time you lived in the state.  You will see the adjustment when you review your state return.  Be sure you entered the info in the Personal Info section when you moved out of NJ. 

[Anonymous]

Thank you for the reply!

I didn't know I could modify the information in "my info", and the software immediately recommended the part year resident.

I now get an "income allocation" page which allows me to specify thet $0 of my wages from a foreign source were earned while resident of NJ.

I did forget to mention my place of work was DE and I had already completed the Delaware Non Resident return. Previously a credit was automatically applied. This time it's not although it allows me to claim it manually under "credit for taxes paid to another state". I assume I am safe to go ahead and do that?

Thank you.

[MaryK4]

Yes you can enter the credit for taxes paid to Delaware on the New Jersey tax return.