NJ nonresident return - supposed to tax income from all states?

[infcl]

I was a TX resident in 2025, and NJ resident in 2020, 2021, and 2024. My employer granted me stock options in 2020 that I exercised and sold in 2025. The spread of exercise_price-grant_price was treated as ordinary income, with federal and state taxes (for NJ, the tax was in proportion to how many days I was an NJ resident in the period from grant to exercise) deducted at time of exercise, with the (federal and state) (income and tax withheld) reported on my W2.

For my 2025 return I am filing Form NJ-1040NR since my W2 has the NJ tax. Looks like the NJ tax calculation as instructed by NJ-1040NR is basically (NJ tax on total income from all states)*(income from NJ sources i.e. reported on W2)/(total income from all states).

I don't get why it's taxed that way. My NJ tax is sourced from holding the options before 2025, I paid the tax in 2025 because I exercised, that makes sense. However say I also had $1 million in capital gains, in a separate unrelated stock sale, bought and sold in 2025.  Under the NJ-1040NR, there would also be a proportion of NJ tax on that $1 million, since it's included in total income from all states. But that $1 million was completely earned in TX, why should any of that be taxed by NJ due to NJ income that happened before 2025?

Edit:

I went through examples for NJ-1040NR, and assuming a constant flat NJ tax rate (I used 10%), the final NJ tax is the same whether I included non-NJ income or not.

Example 1: include non-NJ income ($1000k capital gain that should belong to only TX)

Line 27 total income all sources = $1500k, NJ=$500k

Line 40 NJ tax = $1500k*10%=$150k

Line 41 Income Percentage = $500k/$1500k=33%

Line 42 New Jersey Tax = $150k*33%=$50k

Example 2: exclude non-NJ income

Line 27 total income all sources = $500k, NJ=$500k

Line 40 NJ tax = $500k*10%=$50k

Line 41 Income Percentage = $500k/$500k=100%

Line 42 New Jersey Tax = $50k*100%=$50k

This makes me feel a bit better. But still, non-NJ income can potentially increase NJ taxes by raising the NJ tax bracket. So the question remains, why should non-NJ income increase NJ taxes?

[MaryK4]

New Jersey uses your total income from all sources to determine the tax rate (bracket) applied to your return, but they only actually tax the New Jersey-sourced portion of that income. 

How the Calculation Works  The NJ-1040NR follows a "proportionate" tax method mandated by state law to ensure nonresidents pay the same rate as residents with similar total income: 

1. New Jersey calculates what your tax would be if you were a full-year resident on your Total Income (Column A). This is where your TX capital gains "push" you into a higher tax bracket (e.g., the 10.75% bracket for income over $1 million).
2. This base tax is then multiplied by the ratio of your NJ Source Income (Column B) divided by your Total Income (Column A).
3. The final tax effectively applies that higher bracket rate only to the NJ-sourced stock option income.

[infcl]

Thanks and yes this was my understanding of the formula as well. I'm just don't understand why philosophically, non-NJ sourced income can potentially increase NJ tax (via higher NJ tax rates).