How does one calculate line 6 in NJ 2210 Exception 3? It reads:
Enter the portion of the Credit for Income Taxes Paid to Other Jurisdictions (line 44, NJ-1040) that is applicable to each period
Do we annualise this as well or do we use how much the credit was for the particular quarter given the amount of out of state income in the applicable period? I sufficiently overpaid taxes in Q1-Q3 even with no credit (the out of state income was intermittent starting in May), but a Q4 income increase may make an estimated payment later this week necessary.
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Perhaps you are referring to the 2210 Worksheet, Exception 3, Line 7, the information provided for the Exception 3 Worksheet (not part of line 6 on page 1). See the details described below for assistance.
Regarding Exception 3, you should calculate the credit based on your actual income earned during each of the periods. Because your out of state income was intermittent and did not begin until May, your credit for the first period (January 1 - March 31) would be $0. For the second period (January 1 - May 31), you calculate the credit based only on the out of state income earned in May. And the last period (January 1 - August 31) would include the out of state income you earned May through August.
On Line 7 of the NJ-2210 Worksheet, Exception 3, you will enter the actual credit .
Based on the instructions for Exception 3, line 7, of the NJ-2210 Worksheet, you should enter the actual credit for income taxes paid to other jurisdictions applicable to each period as indicated above.
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