Since you both had NY source income you should file a joint federal return and joint NY return and a joint NJ return as well. However, you will be able to allocate only your income to NJ and get a NY credit for any double taxed income. Here are the steps:
- In the federal "My Info" section
- Edit your husband's personal information
- Indicate he lived in NY on Dec 31st and no other states
- Married and wish to file jointly
- Edit your personal information
- Indicate you lived in NJ on 31 Dec and no other states
- Continue
- Still in the "My Info" section
- Scroll down to the "Other State Income" topic
- Verify/answer "No" you did not earn income in another state. You NJ return will generate based on your resident state answer previously
- In the "Wages & Income" section
- Enter your income sources as normal (the same for deductions)
- Now work your NJ state interview before the NY state interview
- The nonresident return is the form/status you want for NJ as this will allow you to allocate only your income to NJ
- In the "Income/Adjustments" section you will allocate zero (0) of your (or your spouse's) NY wages to NJ. This is correct because if you were filing separate NJ resident return NY would tax the income and NJ would give you a credit for those taxes.
- Allocate the business income to NJ and later you will get a credit on your NY return for those taxes (same reasoning as above only from NJ perspective).
- If you have joint income sources you should allocate your portion to NJ and get a credit on your NY return later (same reasoning as above from NJ perspective)
- Continue to complete the NJ interview
- Now you can work your NY return.
- When you get to the Credits section you need to select the "Credit for taxes paid to another state"
- You will verify the NJ income and tax liability paid to NJ for the NY credit
- Continue
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