New Jersey Non Resident Tax Filing - Total Wages too high

[anon40]

For my NJ non-resident tax filing, TurboTax is automatically adding all states income. I am a resident of MA and my MA state income already includes income earned in other states as well, so the NJ total wages are $15k too high, and my tax liability is inaccurate. How do I stop the program from doing this?

More detail:

1. I am filing in CA, MD, and NJ as a non-resident and MA as a resident. 
2. My total federal wages (box 1) and MA wages (box 16) are both $108K
3. Turbotax is summing all state wages under NJ non-resident filing to show $123K total wages.
4. My 401K contributions total $3300 (I know these are not tax-deductible under NJ, but I still don't need all my state incomes being summed) 

[anon40]

Hello, I would appreciate a reply to this!

[MarilynG1]

Most states start their tax calculations with the Federal AGI amount, so if you see this amount at the beginning of your state form, it's not unusual.  They then adjust their calculations from there.  You'll see this on the New Jersey Form 1040, with Column A showing the Federal Amount and Column B showing the NJ amount, and on the Income and Deductions Summary page in the NJ interview.

As you proceed through the state interviews, you get a chance to subtract various types of income that don't belong to that state, so pay close attention to the questions on each screen.

In New Jersey, look for a screen titled 'Did you earn all your wages in New Jersey?' where you can allocate the correct amount to NJ.

Here's more info on How to File a Non-Resident State Return.

@anon40 

[anon40]

I understand this, but the gross income that NJ calculates is incorrect. It sums my total state W2 wages. Since I am an MA resident, my MA W2 already totals income I have earned in all states. So summing MA + the other states' incomes is double counting income. My wages earned in NJ are correct, but the tax rate is calculated on the gross income, not the wages earned in NJ. Since my gross income is higher, my taxes owed on the amount earned in NJ are higher and this is incorrect.

Where can I adjust the NJ gross income amount?

[MarilynG1]

You don't need to adjust the New Jersey Gross Income Amount, which shows on Line 29 on Form 1040NR.

The amount of your NJ income is calculated as a % of your Total Income (Line 41).

So the tax amount that shows on Line 40 is for your total income, then NJ takes the calculated % of that to arrive at your NJ Tax on Line 42. 

@anon40 

[newkat2000]

Were you able to resolve this? I am running into this issue as well - my total state wages from column D in the Total Wages Worksheet is my two state wages combined which is almost doulbe my federal wages...

[fanfare]

You have to do your non-resident state(s) first, and your resident return last.

[swenson45]

but line 40 will be too high if the gross income from column A in line 15/line 29 is too high, since line 40 is calculated from the tax tables, which uses a multiplier. using anon40's numbers this would result in an extra ~$950 in NJ taxes. 

I'm having a similar issue, would love to know if this can be adjusted 

@MarilynG1 

[anon40]

@MarilynG1  - would appreciate a response to my reply. Other people are facing the same issue.

[MarilynG1]

If you're filing a Part Year Resident return for New Jersey, you'll get a screen in the NJ interview asking you to allocate wages that belong to NJ.  This amount will show on the Allocation Worksheet for Part Year and Non Residents, which carries over to the NJ 1040 P2, Line 15.

If you feel this is not being handled correctly in your NJ return, you could delete NJ and step through the interview again to repopulate the forms. 

Here's more info on How to File a Part-Year Resident Return and Allocating Income for a Part-Year Resident.

@anon40 

@swenson45