New Jersey non resident tax calculating incorrectly

[David1119]

I am a New York resident that worked in both New Jersey and NYC during 2021. I am filling in the information for the non resident New Jersey form. On the "Lets confirm your taxable state wages" page it lists both the NY and NJ taxes that were on my W2 for the job that I worked in NJ. I removed the NY portion and on the next page it lists my total W2 wages and asks how much I earned in NJ. I enter the same amount that is on the W2 that I did not exclude on the previous page. After doing this, the "Income and deductions summary" appears to be showing the correct amount of income for NJ which should just be the box 16 amount on the W2 from the NJ job, however when I get to the "Your New Jersey bottom line" page my gross income is a much higher number than the box 16 amount. I believe that this page is including income I earned in NY even though I was not a resident in NJ. Does anyone know what I may be doing wrong?

[ThomasM125 · Accepted solution]

You are not doing anything wrong. 

New Jersey taxes you on all income earned. Then, they take your income earned in New Jersey and divide it my your total income, to arrive at a factor to reduce your income tax in proportion to the amount of income you earned only in New Jersey. So, your total New Jersey income will include your New York income, but your tax will factor out the portion of that income earned in New York.

[coffeeling12]

Hi Thomas, 

I have the same situation, and am wondering if the 'Nonresident Subtraction from Income Tax' in the summary table of NJ nonresident is incorrect. My first company is in NY, and the second company is in NJ. I live in NY for the whole year. Should 'Nonresident Subtraction from Income Tax' within NJ nonresident file be (amount earned in the NY * marginal tax rate in NJ) ? Right now, the summary seems to use the portion of NY earnings directly (close to the first company's earning / total earning for the whole year), which underestimates the return from NJ nonresident.  Is my understanding incorrect? Thanks.

[ErnieS0]

The nonresident subtraction that TurboTax uses is not an actual part of the New Jersey tax return. It is the difference between the actual tax and the tax that would be paid if 100% of income was earned in NJ.