Rporting wages for NJ

[aratnak1]

Hi,

I work in NY and live in NJ. My W2 has federal wages which matches with my NY state wages in box 16 and with corresponding state taxes in box 17. I also have NJ state wages in box 16 (which less than my federal/NY state wages) but no corresponding state tax in box 17. Ideally, I should get credit for NJ taxes since I am paying taxes in NY (and my wages are from NY). How should I handle this situation on TT? Should I report entire wages in my NY return? Also, which wages should I report on my NJ tax return (NY/federal or NJ)?

Here is the sample

Federal wages 1000

NY state wages 1000 with 200 in box 17

NJ state wages 300  with no tax in box 17

So, should I report 300 in NJ or 1000 in NJ? Also, for NY should I report entire 1000 (which is expected)?

Thanks.

[BillM223]

The way that NY and NJ work is that you report all wages earned in NY to NY (which I guess in your case is 100% of your wages). As you know, this will generate tax for NY State which will be carried back to NJ to be a credit.

Oh, this means that you do your NY nonresident first before entering your NJ resident return.

I don't think it matters what you "report" as NJ income, because the NJ return will take your data from the federal return. If I am not mistaken, the wages reported for NJ will be ignored...take a look at the NJ return when you finish.

So it may appear that you are declaring 100% of your federal income in both states...but because of the NY tax being a credit in NJ, the effect is that you are taxed only once on each dollar. It would be a perfect scheme if the states' taxation rates were identical, but as they say, "it's close enough for government work."

[aratnak1]

Thanks @BillM223. I tried both scenarios (removing NY wage and removing NJ wage) on NJ return and as you said, both give me NJ tax credit. So looks like, either way it works!! But just for accurate reporting purpose, should I remove NJ wages (which are lower) from NJ return or NY/federal wages?

[DanielV01 · Accepted solution]

Typically you remove the NY line.  But in this case you need to remove the NJ line.  You are taxed in NJ on all of your income.  Since in this case all of your income is getting reported to NY, but your W2 does not reflect the same number for New Jersey, (and gives a lower amount), you want to make sure that at least all Federal income is being reported to New Jersey as well.