NJ Nonresident married couple question

[AG76]

Hello. Married couple, both NY residents, one works in NJ. From NJ's site:

"Married/CU couples both nonresidents: Only one has New Jersey income

If you and your spouse were nonresidents for the entire tax year, and only one of you has income from New Jersey sources, the spouse with income from New Jersey may file a nonresident return using the Married/Civil Union Filing Separately status. The spouse may also use that status, even if you filed a joint federal return. You have the option of filing a joint nonresident return, but you will have to combine your income and deductions."

This makes it seem like the spouse who doesn't have any NJ income has to file as well, but that doesn't make sense...can anyone clarify? Thanks!

[Vanessa A]

If you file a joint NJ return, then you will need to include the spouses income that doesn't work in NJ.

To avoid including the spouses income that doesn't work in NJ, you would have to file a separate return for NJ.  As stated, you can still file a joint return for federal and you can still file a joint return for your resident state. 

[TomD8 · Accepted solution]

I think the NJ Non-resident tax instruction booklet is a bit clearer:

"If both you and your spouse were nonresidents for the entire tax year, and only one of you had income from New Jersey sources, that spouse can 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 in that case, your joint income would be reported in column A of Form NJ-1040NR."

https://www.state.nj.us/treasury/taxation/pdf/current/1040nri.pdf

If the spouse with NJ income chooses to file separately, only that spouse has to file an NJ return.

[AG76]

thanks

[AG76]

thank you

[ltra922]

Saw this post from a few years ago but it pertains to a question I have now so hopefully folks can answer and verify.

So my wife worked in NJ in 2024 and Turbo tax added the NJ state (and NY - our residency state) and I filled it out as I always have as joint filing. It seems it’s combining our income and saying we owe NJ. This doesn’t seem right to me cause when I look at the 1040 NR from NJ it shows my income in a joint file and using its formula it comes out negative for us. It would make sense to me if I only file the 1040NR for her only. 
But does this mean I have to change in turbo tax to filing separately? Or can I just remove NJ from the return in TT and manually file the form with NJ with only her filing herself and mailing it in?

thanks!

[DaveF1006]

It depends. Since your wife worked in New Jersey in 2024 and you live in New York, New Jersey will tax her money earned in NJ. New York, as your home state, will tax all of your combined income (but should let you get a credit for taxes paid to NJ on the NJ money).

If you file together in TurboTax, it'll probably give both of your incomes to NJ for the filing where you are not a resident. This is why‌ NJ is taxing your income, even though only your wife worked there.

Filing Jointly in NJ: If you're filing as “Married Filing Jointly” federally, you generally have the option of filing jointly in NJ as well. When doing so, NJ will ask for an allocation of income—yours versus your wife’s—to calculate tax only on her NJ-sourced income. 

To ensure the proper flow of income between both states, be sure you prepare your non-resident NJ return first so that you will be given proper credit on your NY return for the taxes you paid in NJ. Be sure also to allocate both your incomes on the NJ return so that only her income is reported and taxed on her NJ return.

[ltra922]

Thanks Dave,

I think it's doing it correctly as what I did was I removed the NJ return and it came out to around a $450 amount due to NY.  When I add the NJ Return, it shows me receiving a $1300 NYS refund and we owe NJ 1700 when her total state tax was $3000 (1400 for NJ and 1600 for NY). 

I think it's right, but I just found it odd that NJ wants the money then NY is giving me the credit, but it's not doing it on the back end and just saying 0 to NJ and NY I owe 450.  

Looks like I just have to pay NJ and get a refund from NY. 

Unless Im missing something?

[BrittanyS]

Yes you are correct, NJ will tax your wife's income and then NY gives you the credit for taxes paid to another.  So, when you file you will pay the tax on NJ nonresident return and receive the credit on the NY resident return.  You can also view the calculations in forms mode if using TurboTax Desktop, by clicking forms in the upper right corner.  

If using TurboTax Online, follow these steps:

1. From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)
2. Select Tax Tools 
   
3. On the drop-down select Tools 
4. On the pop-up menu titled “Tools Center”, select View Tax Summary 
5. On the left sidebar, select Preview my State Return

@ltra922