I am trying to determine the appropriate credit on my NJ return for taxes paid to other jurisdictions. For some background:
- Status is married filing jointly
- My wife and I live in NJ. I work in NJ and she works in NY
- Box 16 on her NY W2 is $150. Box 16 on her NJ W2 is $70 (using simple numbers)
- There was a period of time last year where she lived in NY, which is why I'm thinking box 16 on her NJ W2 is so low. I looked at her W2s from last year and they were nearly identical. But with her NJ wages being reported as much lower this year, its significantly impacting the credit we get for taxes paid to NY
Does it matter the number of days we lived in NJ vs. the number of days we lived in NY?
Any assistance is much appreciated.
I’m not fully understanding what you mean by, “There was a period of time last year where she lived in NY.” In 2022, were you a full-year New Jersey resident, and was she a part-year NJ resident?
Or did she live in New York while remaining a NJ resident? New York has a statutory resident rule. NY considers you to be a resident if you maintain a permanent place of abode in New York State for substantially all of the taxable year and spend 184 days or more in New York State.
See Domicile.
If she was a part-year resident, you will have to file a NJ part-year resident and a NJ part-year nonresident return. NJ requires the same filing status as federal unless one spouse was a full-year nonresident. If you file together for federal, you’d have to file a resident and nonresident return.
If you file separate federal returns, you can file a full-year resident return and she will file two part-year NJ returns.
As for your credit being higher last year, if you both lived in NJ for all of 2021 and she worked in NJ, then all her NY income was would be taxed on the NJ return.
In 2022, your credit would be lower if she lived and worked in NY for part of the year. There would be a period of no double-taxed income.
If you both lived in NJ all year, I don’t understand why she has split wages since all her NY income would still be taxable to NJ as a NJ resident.
Thank you for the reply. The timeline is complicated but here is a simple breakdown.
As of January 1, 2022: We were engaged (not yet married)
January-March: We both lived in NJ
March-June: She lived in NY, I lived in NJ (our apartment lease ended and our house wasn't ready yet)
June: Bought house in NJ
October: Got married
June-December: Both lived in NJ
We were both primarily NJ residents. She was just living with her parents back in NY for a couple months while we were getting our new house ready. All of my income was from NJ and all of her income was from NY.
Just trying to figure out how to calculate double taxed income in NY and tax paid to NY (see attached picture).
You would be full-year New Jersey residents if she lived temporarily in NY. All her income would be doubled-taxed so you’d pick up her New York wages and the allocated New York tax.
Thank you!! Much appreciated.
So just to confirm here are the actual figures I'm getting:
- Total NY wages (box 16 on NY W2): $159,000
- Total NJ wages (box 16 on NJ W2): $74,000
- Total New York State Taxes (in TurboTax NY state return summary): $9,438
Then, on my NJ return, total double taxed income (first box in my screenshot) is $159,000 and taxes paid to NY (second box) is $9,438
Does this look right to you?
Thanks again.
If her total NY wages (box 16 on NY W2) was $159,000 and her total NJ wages (box 16 on NJ