Need to exclude my wife's income from NY State return. Her income and residency is NJ.

[brianweb]

My wife's income was from NJ, mine was from NY (we are residents of NJ).  For the NY state return, NY is taxing us on our combined income, when it should just be mine.  How can I exclude her income from the NY state return?

[DanielV01 · Accepted solution]

Your wife's income is not taxed in New York.  However, it is factored in to determine your NY taxable income (don't worry, it all works out).  What happens is this:  say your job earns 75K and your wife 25K.  What New York will do is determine what your tax would be (married filing joint) on 100K.  Then, they make you pay 75% of that amount, which is what corresponds to your income only.  However, New Jersey will give you a credit for your New York tax paid, so it should even out.  I have copied the link to NY's Nonresident Return Instruction booklet:  https://www.tax.ny.gov/pdf/current_forms/it/it203i.pdf (best described on pages 6 and 7)