NJ will calculate
what your tax would be on all your income as if you were a resident. Then
they will prorate the amount
of NJ tax to the percentage of
income you actually earn in NJ.
So if your income from all
sources is $10,000 but your NJ source income is $8,000, NJ will calculate
the NJ state tax on $10,000 then multiply the total state taxes generated by
80% ($8,000/$10,000). So even though you all your income is being reported
on your NJ state tax return, you are only being taxed on the NJ source portion
of your total income.
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