Part-Year NJ Non-Resident for One Spouse Only? Filing MFJ at Fed but both non-residents of NJ

[Anonymous]

I worked in NJ for the first 3 months of 2016, while maintaining domicile in CA where my spouse was employed full-time. I had a CA driver's license and official lease in CA. Since I also lived for less than 183 days in NJ, maintaining a domicile outside of NJ, I believe I am a non-resident.

Then, I moved back to California for another assignment with the same employer. Employer based in NJ, but started deducting CA state taxes from this point on till the end of the year.

NJ 1040NR and GIT-4 state "Married/Civil Union Couples and Filing Status. If both you and your spouse were nonresidents of New Jersey during the entire tax year, and only one of you earned, received, or acquired income from New Jersey sources, the spouse who had income from New Jersey sources may file a separate New Jersey return even if a joint Federal return was filed. The spouse with income from New Jersey sources calculates income and exemptions as if a Federal married, filing separate return had been filed. You have the option of filing a joint return, but remember, joint income would be reported".

So, can I file alone for NJ state tax and if I do, do I file MFS or Single? Does TurboTax even allow for such filing?

[DanielV01 · Accepted solution]

Yes, you are a nonresident, and yes, you may file Married Filing Separately in New Jersey.  This may be done in TurboTax, but it is much better to do so with desktop software.  Please note the following FAQ that describes the process:  https://ttlc.intuit.com/replies/3301995

You will use the status of Married Filing Separately since your Federal Return is Married Filing Joint.  You are not allowed to use the Single filing status.  Since you do need to create a mock, or an "As-if" return, the New Jersey return will have to be mailed in.  

[Anonymous]

TurboTax is treating me as a Part-Year resident of NJ. Should I be changing it?

[DanielV01]

You may want to check an entry in the Personal Info Tab.  You should say that you LIVED in California only, but that you did work in another state, New Jersey.  Your situation does not qualify for "living" in New Jersey because of the temporary nature.  This should convert the part-year return to a nonresident return.  If it doesn't, then override it.  You should file a nonresident return in NJ.

[Anonymous]

But if I convert to a NR in NJ, it treats the whole year income as taxable for NJ?

[DanielV01]

Not really.  NJ uses all of your income to determine the tax.  They figure out how much tax you would pay on all of your income, and then tax you proportionate to the percentage of income earned in NJ.