NJ Credit for NY Taxes - Not Working
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Level 2

NJ Credit for NY Taxes - Not Working

I have an unusual situation for 2020.  My husband received a lump sum separation payment for an employer for which he left in mid 2019.  On the NY return, I had to calculate 4 years of previous taxes starting in 2016 on form IT-203F to get an average (?) taxable amount for NYS.  He did not live nor work in NY at all in 2020.

Do I still need to calculate the same tax credit on the credit for out of state taxes form in NJ?  If so, what amount do I use.  The instructions refer to the amount showing on the IT-203 for NY for taxable income.   Turbo Tax picks up that number, which is about 60% of the amount he actually received in that lump sum payment.

Thank you.

2 Replies
Employee Tax Expert

NJ Credit for NY Taxes - Not Working

No Mary2e, you do not need to calculate the same credit for New Jersey. New York Form IT-203F shows how much of your current income should be New York versus non-New York income based upon previous employment in New York.

 

New Jersey residents are taxed on all income received, so the entire payment is taxable to NJ. However, you will only receive an other state tax credit for 60% because 60% is NY income, which is the amount reported on your NY non-resident return. The other 40% would be considered NJ income. A NJ resident would not receive an out of state tax credit on NJ income unless your husband worked in multiple states, in which case you would have to allocate and file other state tax returns.

Level 2

NJ Credit for NY Taxes - Not Working

Ernie,  Thank you very much.  I suspected that would be the response and wanted to check to make sure I was transferring the correct amount to the NJ return.

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