"Remove These Wages" - I work in New York (NY) and live in New Jersey (NJ)

[Bruno2k5]

Hello,

I'm very close to filing my tax return and have 1 question I need answered. I'm confirming my taxable wages where I work at the end of the State Taxes section and have the checkbox to "Remove These Wages" from NJ or NY. I live in NJ and work in NY. I did the NY State return first and this question came up during my NJ State return.

What wages should I remove and why?

[ReginaM]

I am sorry, we do not have access to your TurboTax Account here on the community board, but it sounds like you need to go back through your State of New York Entries and make sure everything was entered correctly.  Make sure that you are filing as a non-resident for New York.  Here's how:

1. While in your Tax Home,
2. Select State,
3. Select Continue next to your New York return.
4. Follow the on-screen prompts to make sure your residency and income is correct in this section.

When entering your New Jersey return, make sure that you are filing a Resident Return.  

1. While in your Tax Home,
2. Select State,
3. Select Continue next to your New Jersey return.
4. Follow the on-screen prompts to make sure your residency and income is correct in this section.

[Bruno2k5]

Hi @ReginaM,

Thanks for commenting. Everything was entered correctly and my filing already shows me as a non-resident for New York.

Now that I am on the New Jersey return, which wages do I remove? I've put a screenshot of where I am at below.

https://i.imgur.com/c8TINT1.jpg

[AmyC]

Remove the NY wages as those are the wages that have already been taxed by NY. NJ taxes a little differently. You should be showing a credit for the taxes paid to NY when done.

[Bruno2k5]

Thanks for the answer @AmyC.

Just so I am understanding this correctly, what do you mean when you say I should be showing a credit for the taxes paid to NY? Where would I see this?

In the top box that say 'NJ Tax Due' I get a smaller credit when I remove 'NY' and a larger credit when I remove 'NJ'. Let me know if this is the expected result.

[AmyC · Accepted solution]

Yes, unfortunately, the smaller credit for removing NY wages is correct. You can see the credit for wages already taxed by NY get a credit on line 42. You will not see the full NY tax liability on your NJ return. States give credit based on the "lower of" value for the taxes. NJ has a lower tax rate so you get the lower credit for your NY income.

If you are viewing online, you can:

1. Log into your return
2. select NJ state return
3. on the left side go to Tax Tools
4. click on Tools
5. Pop up box, click on View Tax Summary
6. should show NJ summary, may need to go to left side, click or NJ Tax Summary
7. Click Back when done (feel free to click around and look at NY and fed)