Our house is in NY, and our investment income is also generated in NY and frankly I don't see why NJ is entitiled to any of that on an apportionment or allocated basis. Further I would be surprised if NY is not going to tax me on the same amounts.
NJ is not taxing both your income and your wife's income. It just looks like it is.
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.
NJ is not taxing both your income and your wife's income. It just looks like it is.
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.