Moved from NJ to NYC

[andrew732]

Hi!

I've worked continuously with Employer A (since 2022), which is based in NYC. Due to a hybrid work policy, I lived in NJ until 10/15/2023, after which I moved to NYC. I naively did not inform my employer until it was too late, so the W2 form was generated with NJ as my home address. This means if my salary was $X, roughly $0.8X was earned while a NJ resident and $0.2X was earned while a NYC resident. I realize I need to file some corrections - namely a NJ / NY partial resident tax form.

However, when filling out this on TurboTax Desktop, I see that New Jersey has a section of

"Enter the following information for income you earned while a New Jersey resident that was taxed by BOTH New York and New Jersey... Do NOT enter the income amount and taxes withheld from your W-2. We need the actual numbers from your other state's tax return." This implies I must fill out the New York tax form first.

However, in the New York "Taxes Paid to Another State" section under "Credit for Taxes Paid", it asks me for a few details:

1. Enter the portion of income that was taxed by New Jersey. In this case, do I file $X (my full salary for the year, since the W-2 is assuming NJ?) or $0.8X, which is the total amount I earned while I was living in New Jersey (and is the "adjusted" amount post-tax filing)?
2. Next, there are sections called "Tax Computed on your New Jersey Return" and "Enter New Jersey Information", including "Enter the following information from your 2023 New Jersey return..." How can I fill this out, if I must fill the New York tax form first?

It's very confusing to me because it seems like both require me to fill the other out first, so I'm stuck in a loop.

[Vanessa A · Accepted solution]

If you work for a company in NYC, and you are working hybrid remote, NY will tax ALL of your income that you earned from that employer as this would not be for the Convenience of your Employer.  This means, you should have had taxes withheld on all of your income for NY.  

NY has a Convenience of the Employer Rule.  Basically, this rule says if you are working remotely for your convenience then you are considered to be working in NY.  If you are working remotely for your employers convenience, then you would not be considered to have income from NY sources.  

When you complete your NY return, then you can take a credit on your NJ return for taxes paid to NY during the 10 months you lived in NJ.  

In general, your home state will tax all in come from all sources.  What you will do is you will file a nonresident return for the states that you do not reside in, but you visit for work and earn money in.  When you file, you will fille out your nonresident states first.  Then you will fill out your resident state, claiming a credit for taxes paid to the nonresident states on your home state return.  You may or may not still end up owing money to your resident state depending on whether or not their tax rate is higher or lower than your nonresident state.  If the non resident state had a higher tax rate than your resident state, your credit will be limited to the amount of tax you would have paid to your resident state.  They will not give you a refund of the taxes you paid to the nonresident state. 

1. Enter the portion of income that was taxed by New Jersey. In this case, do I file $X (my full salary for the year, since the W-2 is assuming NJ?) or $0.8X, which is the total amount I earned while I was living in New Jersey (and is the "adjusted" amount post-tax filing)?  On your NY return, you would not enter anything here as NY was your Non-Resident state while you were living in NJ, then it became your resident state while still working in NY.  You are not entitled to any type of non resident credit for NY. 

2. Next, there are sections called "Tax Computed on your New Jersey Return" and "Enter New Jersey Information", including "Enter the following information from your 2023 New Jersey return..." How can I fill this out, if I must fill the New York tax form first? Fill out your NY return first but do not enter any of the information regarding what is taxed by NJ as that is not relevant. As stated above, if you were hybrid for a NY company, all of your income is  taxable to NY so there is no need to prorate anything.  Then on your NJ return, you will enter the amount that was taxed by NY on your NJ return and you will get a credit for the amount you paid to NY on the income you received while a resident of NJ. 

Multiple States

File Non Resident State Return