Hi All,
I moved from NYC to NJ in Sept of last year. I primarily WFH and my employer has offices in both NYC and NJ. My address and associated work office changed at the same time as my primary residence. In summary, when I lived in NYC, I worked from NYC and when I moved to NJ, I worked from NJ. TurboTax said that I would be filing as part time residents for both NYS/NYC and NJ.
I tried with the tax credit (paid to another state) on the NY filing but it got confusing fast. First NY shows my entire income not just the portion that was actually earned in NY on the W2. The filing asked me to allocate my earnings for what is actually earned in NYS and NYC. I just did percentage as I knew how much was NJ's portion (noted on the W2) and just divided it by the total income since the form did not allow input of the actual number. When I got to the additional forms page, its notes that Turbotax did not calculate any tax paid to NJ even though I've completed the NJ form first.
A few questions:
1. Should I claim tax credit from my NJ filing or NY filing?
2. Is my allocation method ok since I know exactly how much was NJ's portion and the total vs. using other methodology?
3. Since TurboTax wasnt able to pre-populate my NJ taxes paid onto the NY form I had to calculate what my NJ taxes were thats paid. My calculation is NJ taxes withheld plus NJ tax refund/due amount. I wasnt actually able to access my NJ tax form without paying and submitting it first. But this seems to be a reasonable methodology. Please let me know if otherwise.
Were you able to resolve your issue here or are you still needing guidance?
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Hi, the issue still remains. I dont believe your response addresses any of my questions in the original post.
Since you switched offices at the same time you switched your place of residence, you should file as a part year resident for New York and New Jersey. The income you earned in New York as a New York resident is New York sourced. The income you earned in New Jersey as a New Jersey resident is New Jersey sourced. Each return will reflect your income sourced in each state.
Furthermore, as a resident of New York, you did not earn income in New Jersey or pay New Jersey tax and vice versa. The credit of taxes paid to another state is when residents of one state are allowed a credit for paying taxes to another state. It prevents double-taxation on the same income. Your situation does not fit the criteria for this credit. Please remove any of these amounts from your return.
Your allocation on your part-year resident returns would be the amounts earned in each state during the time you were a resident. For additional information, please see How do I allocate (split) income for a part-year state return? and How do I file a part-year state resident return?
@LenaH thank you! Makes sense. I do have a couple follow ups.
1. My salary did fluctuate during 2023 due to raise and bonus so not a clear cut split by time spent in each state. Additionally, while a resident of NYC/NYS I went on work trips to NC (this is another w2). If I take box 1 wage and subtract out NC wage and NJ wage I would assume this is NYS wage. However this number is different from what is noted as NYC local wage. Which one should I go with? Take NYC wages as NYS allocation or subtract the other states wages from the total?
2. For the work trips to NC while living in NYC/NYS are those wages double taxed? Do I claim credit in this scenario? I have a separate w2 for NC issued by the same employer.
Thank you!
1. Each state taxes income a little differently as well. For example, NJ taxes the money you save pre-tax in retirement at the federal level while NY does not. Therefore, you can't do a simple subtraction to get the right wages.
For the NYC wage, that would make sense for your residency wages. Does it look like that includes the NC income, as that would be logical since you lived there during your trips.
Additionally, if NYC includes NJ wages, that is wrong. You don't want to report NJ wages. You may need to speak with HR to get the numbers right.
2. You will prepare NC first and create a NC tax liability. Then when you prepare NY, file for a credit against the NC income that is being double taxed.