I live in NJ but work in NY, how do I enter state tax?

[CheeseLord]

I have only one NY income, and my W2 has two states taxable wages on box 16.

One is for NY and the other is for NJ.

I knew I should file a none residen tax return for NY and a resident tax return for NJ.

My question is how I should enter them in the wags & income section.

If I enter them according to the figures on the W2. something looks wrong.

Assuming my total earning is 10k, the NY taxable wage is 7k, and the NJ taxable wage is 9k.

When I file for NJ tax return, the systeam would consider that my total taxable wage is 16k.

However, it should be 9k.

Did I do anything wrong when I eneter the wags & income section.

[ErnieS0 · Accepted solution]

Remove your New York wages from New Jersey to stop TurboTax from double counting your income on your NJ return.

• In the NJ section, go to the screen Let’s Confirm Your Taxable State Wages from (Your Employer).
• Check Remove These Wages next to NY. Then Continue.

New Jersey residents working in New York are taxed by both NY and NJ on their earnings. NJ provides a credit for tax paid to NY.

New Jersey state wages are often higher than federal or New York wages because the Garden State taxes some benefits that the federal government and NY do not.

[CheeseLord]

Thanks for the tip.

[feiwenw66563]

@ErnieS0 My son earned income from NY (Amount A) and CA (Amount B) , living in NJ. 

For CA state, it only include the earnings from CA (Amount B). However, in NY state form, it uses the Federal AGI amount. Should it be the income earned from NY only (Amount A)? Where I can exclude CA earning from NY State? 

[ErnieS0]

Hi @feiwenw66563. The New York nonresident income tax form IT-203, will include all federal income in column A (Federal amount) and NY income in column B (New York state amount).

NY will compute a base tax as if all income for the year was earned in NY. That base tax is then multiplied by NY income ÷ total income to come up with the NY tax. For example, if your total income is $25,000 and $12,500 was earned in NY, then your tax rate is based on $25,000 but your actual tax is 50% of the tax on $25,000.

[LCM1110]

Hello all,

I am an NJ resident and I work in NY.  When I am filling out my New Jersey return it at no point routes me to a page that says "Let’s Confirm Your Taxable State Wages".  I am concerned that I am not then able to receive a credit for my taxes paid to New York. 

Please advise, thanks!

[ErnieS0]

You will not see “Let’s Confirm Your Taxable State Wages” in the New Jersey section unless you have state wages for both New York and New Jersey on your W-2.

Check box 16 of your W-2. If you worked in NY all year and lived in NJ all year, then your W-2 will usually only have a line for NY wages and tax withheld because NJ gives you a credit for tax paid to NY.

You can confirm the credit for NY tax on the screen “Summary of Taxes Paid to Other States.” You will see New York and a credit amount.

TurboTax will automatically compute this if you prepare your NY return first. If you started with NJ and don’t see a credit, you can Edit to enter your double-taxed wages and NY tax liability, or you can delete both NY and NJ and start over by adding and completing NY before NJ.

@LCM1110

[angiecaracely]

BUT DO YOU GET THIS CREDIT ONLY IF YOU HAVE  BEEN DOUBLE TAX? BECAUSE  EVERYTIME I TAKE THAT CREDIT  THE DEPARTMENT OF NJ TREASURY SENDS ME A LETTER SAYING  THAT I WAS NOT ELIGIBLE FOR THAT CREDIT WHEN RECEIVING A FULL REFUND FROM NEW YORK. AND THEN I END UP ALWAYS PAYING NJ BACK FOR THE PASS YEARS. SO DO I PUT A ZERO IN THAT BOX ?

[ErnieS0]

Yes. You are only eligible for a credit on double-taxed income if you pay New York tax on your income. If you receive a full refund of NY tax withheld, then you paid no tax to New York, so none of your income was double-taxed.

If you are constantly filing a New York nonresident return to get a full refund, contact your employer to stop NY withholding. Or, you may be doing things incorrectly and should be paying NY tax.

@angiecaracely 

[angiecaracely]

So how do I go about in filing, what do I put when doing the double income in NY do I put a zero. How do I know the amount of tax is correct. And am I eligible for NJ earn income credit. In my w2 form all taxes are being taken from New York income. I’m just confuse when doing the NJ resident form 

[ErnieS0]

What is your situation? If you physically work in New York but live in New Jersey, then you should be paying NY income tax. In that case, you can claim a credit for tax paid to NY on your NJ return.

New York considers hybrid work to be full-time NY work. If your employer allows you to work from home a few days a week, NY considers that to be the same as working in NY. All your telecommuting income is taxed by NY.

If you never work in New York, then you should claim $0 income on your nonresident NY return and not fill out the other state credit section in NJ because you are not paying any NY tax.

@angiecaracely 

[angiecaracely]

I do pay taxes in New York but everytime I take the credit  towards  New Jersey. I always get a letter from the treasury saying I owe them money and that I should put zero  for the credit paid to other  jurisdictions. Bc I get some refund from the NY state. Taxes are not being taken from New Jersey but only from New York. So I’m confused if I should even be eligible for tax credit in nj which seems higher then the taxes I owe.

[ErnieS0]

Are you sending a copy of your New York return to New Jersey? NJ will not accept the credit for taxes paid to another state without a copy of the other state’s return.

We’d have to know what the letter says, but it sounds like NJ denied your credit (set it to $0) because they do not have a copy of the New York return. NJ will restore the credit if you send a copy of the NY return. That is usually mentioned in the letter.

TurboTax will send the NY return electronically if you e-file your NJ return. Sometimes NY gets lost.

The other problem may be that you are claiming your entire NY withholding (W-2 Box 17) as tax paid. You can only claim your NY tax liability in the other state tax credit (withholding minus refund).