Live in NJ work in NY, W2 shows income for both NJ & NY but on box 17 shows only one state income tax which is aligned to NY state wage. How does that impact the ITR?

[frenzy_pak]

Which section/step in NJ return do we remove the income?

[DawnC0]

If you work in New York and live in New Jersey, you would have to pay New York income taxes as a nonresident and also, pay New Jersey income taxes as a resident since you live in New Jersey.  However, residents of New Jersey (and most other states) can take a tax credit for taxes paid to other jurisdictions.

If the income is doubled on the state section on your W-2 (it is required by law to be reported this way), you will be able to adjust this amount on the NJ resident state return, see image attached.  On the next screen, you will be able to ''remove'' those wages from the ITR.  

Prepare the NY nonresident return first and then TurboTax can apply a credit for the taxes paid to NY on your NJ resident return.  

 When would I have to file returns in more than one state?

[frenzy_pak]

NJ resident w/ NY income, if we removed NJ income from W2 input & type it back in, will that create an issue?

[DawnC0]

No, it should not.  If you want to be sure it is right, you can delete the W-2 and re-add it if it is not showing correctly.  The w-2 should show both states.

[2012]

Hi DownCo.  I also live in NJ and work in NY.  The company issued two (2) W2 (NJ fuller and NY emptier) for 2020 tax return, and my question is that as much as I understand inter-state tax credit, why would not NJ recognize 100% of what I paid to NY as NJ tax credit?   For example, NY withheld $1,000 state income tax (NY W2 Box 17), while NJ recognized only $940 tax credit on NJ Sched NJ-COJ Line 1B?  The percentage comes out approximately 94%, and it's been like that since my employer issued two (2) W2 forms.  Thank you in advance for your comments.  J   

[TomD8]

@2012 

The credit you get for the taxes paid to NY can't exceed the tax you would have owed if the income had been taxed only by NJ.  To put it another way, you can't get a credit for more than you owed to NJ.

[2012]

Thank you for your comment!  I understand the tax credit for NJ can't be greater than NY's, but my question was why they are not same?  My NJ wage is higher than NY wage by the amount of Sec. 125 deduction on W2, yet NJ recognizes only 94% of the tax I already paid to NY?  J

[mmccourt816]

Hello,

I picked up a 2nd job at a restaurant this year. For my main employer I receive two w2s one for new jersey one for new york  for the second job I only received one and there is no  mention of NJ. Do I need the two state w2s in this case? 

thank you! 

[BrittanyS]

You do not have to have two W-2s to file your return.  If you received two W-2s from the same company, you would want to verify if your wages, FICA, and Federal Income matches on both forms.  If so, you will enter it as one W-2 and include the additional state tax under the state section on the W-2 screen.  You will be required to file both New Jersey and New York returns.  For the state you do not live in, you will file a non-resident return.  When filing the state returns, file the non-resident form first.  You can receive a credit for taxes paid to another state.  

@mmccourt816