Work in NY, live in NJ. Why are cap gains (stocks) showing as taxable in NY? I tried allocating $0 to NY but "Additional income taxed by NY" line still shows the amount

[np07310]

Both cap gains and dividends seem to show up here.  I'd like to exclude from my NY non-resident return but am unable to do so (even after a call with a TurboTax specialist).  Please advise.

[ErnieS0]

Capital gains and dividends will show up in New York adjusted gross income because of the way NY calculates tax for part-year and non-residents.

NY includes income earned everywhere to come up with a base tax amount. Nonresidents then pay tax on the NY percentage of the base tax (NY income ÷ all income). For example if you made $90,000 in salary and had $10,000 in capital gains, your base tax would be the tax on $100,000. Suppose that tax is $10,000. Your actual NY liability is 90% ($90,000/$100,000) of your base tax.

Check your IT-201. It will have a NY column. Capital gains should be blank or $0. The allocation will be on page 2 line 45.