NJ is asking tax on income (W-2) I earned while living in MA with MA based employer.

[puneetswami9]

In 2023, for the first 9 months (Jan to Sep) I was based and worked in Massachusetts for  a pharma company. I have already filed and paid my MA state taxes for the income earned in MA. Starting Oct 2023, I got a new job with NJ based employer and hence lived and earned my wages in NJ from Oct 2023-Dec 2023. Wife also working but she is in NJ full throughout 2023. But my MA employer was still withholding both MA (major part) but some NJ states tax too (~$5K), as my primary home address with MA employer was in NJ as I and my my wife own our home here in NJ. I was only renting in MA. That's why the W-2 from MA based employer also shows NJ address. I tried contacting them to fix it and show MA address after I have left the company in Sep 2023. They won't  MY CPA filled my MA state taxes for the income earned in MA...straightforward and simple. For NJ, he used my Oct-Dec W-2 (based on my new Job in NJ + my wife's NJ W-2 as she was here throughout 2023) and did a MFJ state filling. This resulted in some refund from NJ, primarily for the state tax that my MA based employer was holding (the $5K) NJ came back saying I owe the tax on entire income (including everything i earned in MA). So they suggested I file a 1040-X and pay NJ taxes on the whole income and show the MA paid state tax as credit (line 44). This is leading to my entire $5K refund from NJ get wiped off and I instead owe sum to NJ now. NJ has higher tax % by income than MA (5%) for me.  Therefore, I am really concerned and not able to comprehend this issue. Could this community please help how to address this. At the end of the day, I am happy to pay NJ for the income I earned in NJ, but making me pay state taxes on things I didn't even earn in a high state tax state like NJ is something I struggle with. I already paid due to MA state for income I made in MA. Why NJ is asking to pay NJ taxes on whole deal. I barely lived here for 3 months (Oct-Dec in 2023). Please guide and help.

[TomD8]

"...I and my my wife own our home here in NJ..."

"my primary home address with MA employer was in NJ "

If your domicile - your main, permanent home to which you return after temporary absences - is in New Jersey, then NJ can tax ALL your income, regardless of where you earn it.  NJ will give you a credit for taxes you pay to other states, so that you won't be double taxed.

So it sounds like NJ is correct in what it is telling you.

[fanfare]

See Schedule NJ-COJ.