NY and NJ source income and moved from NY to NJ mid-year

[petetuit]

Income:

- I worked in NY the whole year with $200k of W2 wage income

- I also earned $20k of passive income (interest, dividends, capital gains) during the year

- I also have $5k of rental income from a rental property in NJ

Residence:

- I lived in NY (not NYC) for the first 9 months then moved to NJ
- Only NY state taxes were withheld from my W2 and I paid no estimated taxes to NY or NJ

So I have both NY source income (full year wages + part-year passive income) and NJ source income (full year rental property + part year passive income), and a mid year change in residence.

Which forms should I be filing (resident vs. non resident, full year vs partial year), and which order should these be done in?  I am using Turbotax desktop.  

Also:

Box 15 of my W2 shows $200k of NY state wages but also $70k of NJ state wages (recall that I only had NY state taxes withheld).  Is the $70k what I put when Turbotax asks me about "double-taxed income while a resident of NJ"?

thanks

[TomD8]

You file as a part-year resident of each state.  This previous TT answer explains how to do that, including the recommended sequence:  https://ttlc.intuit.com/community/state-taxes/help/how-do-i-file-a-part-year-state-return/00/26057

This previous TT answer has some info on doing the part-year NJ return.  (Change the year in part 5 of the answer to 2019):  https://ttlc.intuit.com/community/state-taxes/discussion/can-i-file-both-a-resident-and-non-resident...

Your "double-taxed income while a resident of NJ" is the portion of your wage income received after you became a resident of NJ.  You became an NJ resident on the day you began living in your new home in NJ.

[petetuit]

I'm not sure if my employer's data is accurate for when I became a resident of NJ.  It may just be based on an estimated move date, not the actual date I moved.  Can I just ignore that amount on my W2, and calculate the NJ portion myself based on my own math?  Will this create a problem if NJ is receiving a copy of my W2 from my employer, which would show a different amount attributable to NJ? 

[TomD8]

If you wish, you can recalculate the state income portion (Box 15) using your own math.  If you decide to do so, do not e-file your return because the computers will pick up the mismatch and reject your return.  Instead, print your return and submit it on paper.  I'd suggest including a note explaining the discrepancy.  Also, do not change the amount withheld (Box 17).  

[petetuit]

I don't think your answer is correct.  See guidance from NJ here:  https://www.state.nj.us/treasury/taxation/njit24.shtml

According to this, since I have NJ-source income (my rental property) while I was a non-resident, I need to file *both* a NJ non-resident return (NJ-1040NR) as well as a part-year resident return (NJ-1040).   

How does one do this in turbotax (desktop version), and how do you make sure that it is calculating everything properly across all the state returns to ensure proper credits?

[TomD8]

Your reading of the NJ instructions is correct.  Unfortunately I don't have the NJ or NY downloads on my computer (I'm a fellow user, not a TT employee), so I can't duplicate your situation.

The best I can do is again to refer you to this previous TT answer on this problem:

 https://ttlc.intuit.com/community/state-taxes/discussion/can-i-file-both-a-resident-and-non-resident... 

If that suggestion doesn't work, I suggestion posting your problem as a new question.  Maybe a NJ-based user will pick up on it and be better able to help.

[Hal_Al]

This is not just a NY-NJ problem, but is a complexity any time a taxpayer moves to a new state but continues to work in the old state.  I’m not specifically familiar with the NY & NJ software, but this is how it’s handled in the states I am familiar with.

I assume you had $200K of total wages, not $270K.  At the W-2 screen, on the line where NY is in box 15, you change the box 16 amount to $130K. Do not change the box 17 amount.  Box 16 of the line where NJ is in box 15, should be $70K.  Alternatively, you leave the NY amount as $200K and change the NJ amount to 0 (or deleted the NJ line). 

You file a part year resident return for both states.  You are going to have to allocate $70K of wages to NJ on the NJ return, but allocate the full $200 to NY on the NY return.  So, yes $70K is the double taxed amount.

[rjs]

Discussion continued in a new thread. Please add any new replies there.

Will turbotax desktop let me file two returns for the same state (NJ)