Non Resident New Jersey Tax Return - I owe money?

[vspede]

I just wanted to check if this is correct.  I'm filing a nonresident New Jersey Tax return.  I live in Illinois and my W-2 shows $5416 in state wages, $146 in State income tax. 

I ran Turbotax and it is saying I owe $98.  Am I missing something?

I ask because previously I had a similar issue for a NR California return that said I owed money but it was because Turbotax was adding in my HSA contributions (which Turbotax did not adequately explain).

Thanks in advance!

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

Please reply to this message with your token so that we can further assist you.

[vspede]

Thanks.  I have the desktop version and it gave me this token number which I cannot post for some reason as it edits it into a phone number.  I am unable to post the token.  Weird. 

But the Token is this: 

1021343115-00680988

[vspede]

Trying to post this again but with spaces.  Odd it won't let me post the code.

1 0 2 1 3 4 3 1 1 5-1 7 9 6 4 4 7 0

[BillM223]

It may be no coincidence that New Jersey is the OTHER state (out of 2) that does not permit the deduction of contributions to an HSA (like California).

Take a look at your NJ return and see if having to declare HSA contributions as income is the cause of your confusion.

[vspede]

In California, you are able to deduct if your filing Nonresident which turbotax does NOT tell you and so i paid CA money for a few years.  The amount was little but i dont want to amend. I didn't even see any HSA options during the New Jersey state walk through?  I'm assuming it should be under credit or deductions?

[BillM223]

The answer is not simple.

If the wages were earned in New Jersey or from New jersey sources, then the HSA contributions withheld from the wage income (i.e., code W in box 12 of the W-2) would have to be added back to New Jersey state income. 

So the question becomes "what is the reason that you are filing a non-resident New Jersey return?"

TurboTax does make it possible in a non-obvious way to address the HSA contribution issue, if you feel that the HSA contributions should not be taxable in NJ in your case..

First, the code W amount is automatically added to New Jersey state income, as you already know.

Then, on the screen entitled "Other Wage Adjustments - W-2", make an entry of something like "HSA addback" and a negative dollar amount of the code W amount. This will subtract the code W amount from New Jersey state income, on the condition that you think it does not apply.

The next screen will be "Other Wage Income Allocation" where you will be asked how much of the income item belongs to New Jersey. Enter zero, although it does not seem to matter what you enter.

[vspede]

I printed out the worksheet and I have a clue.  My Federal wages are different from my combined state wages by $169 (which I have no idea why).  New Jersey is taking my combined state wages (IL, MA, NJ) and using that number to figure out my tax owed and not my Federal total wages.  So even though New Jersey has already had $145 of state Income Tax paid.  They believe I have to pay $98 more.  Is this correct?

[BillM223]

This seems odd all the way around.

If I understand you, your NJ taxable income is $169 higher than it should be, yet you owe an additional $98? That would imply a marginal tax rate of more than 50%, so I question if I understood you correctly.

I think it would be productive to contact your payroll people to ask why the discrepancy between your federal income and your state incomes. This might go a long way to answering your final question.