New Jersey resident married filing joint

[user17597544422]

Hello,

I live in New Jersey and working remotely most of the year for a company in New York. I married in April 2024 and my wife came to New Jersey from Canada in October. I know I can elect mfj for federal and would have to disclose worldwide income. How about for New Jersey? If I do married filing jointly do I have to disclose her worldwide income for full year even though she started her domicile in NJ from October ?

[Opus 17]

Generally, yes, if you file a joint state return, you have to declare all her world-wide income (in fact, it flows from the federal return).

Most of the time, you are required to file your state return using the same status as your federal return. In some states it is permitted to file a joint federal return but MFS in the state, when the two spouses have different domiciles.   However, it seems that New Jersey only allows that when the spouses have different domiciles for the entire year.

https://www.nj.gov/treasury/taxation/pdf/pubs/tgi-ee/git4.pdf

[user17597544422]

Got it thank you and when you say all worldwide income, should we be reporting her income even before she was in New Jersey (pre-October) in our joint return?

[Opus 17]

---

@user17597544422 wrote:

Got it thank you and when you say all worldwide income, should we be reporting her income even before she was in New Jersey (pre-October) in our joint return?

---

I do want to ask another expert about the residency issue @pk

To file jointly, you must treat your spouse as if they were a US resident for the entire year.  That means you report on their federal return, all their world-wide income.  The IRS will give a partial deduction or tax credit to offset double-taxation if she also paid income tax on the same money to the other country.

When you move on to your NJ state return, all the federal income will automatically flow to the state, that includes any foreign income you report on the federal return.   NJ will allow some state-specific additions and subtractions, but you are not allowed to subtract your wife's income from before she physically moved to NJ.  This is because, if you file jointly and you were an NJ resident for the whole year, your spouse is also considered an NJ resident for the whole year.  NJ will give a tax credit for income tax paid to another US state, but will not give a credit for income tax paid to a foreign government.

If you want your spouse's pre-NJ income to not be taxed, you will both have to file using married filing separately status.  That usually results in higher federal taxes, but in this case that might be offset by not paying NJ taxes on income from Canada.   You would have to try it both ways to see. 

[pk]

@user17597544422  , having gone through this thread and generally agreeing with the excellent responses of my colleague @Opus 17 , my understanding of the situation is as follows :

1.  You are a US person ( citizen/GreenCard/Resident for tax purposes) with US tax-home, living in NJ. If you are not a US citizen, then your own citizenship info would be helpful

2. Absent any additional facts, your world income is US sourced and NJ sourced ( work performed  in NJ).

3.  You married in 2024 and therefore  are eligible to file MFJ for federal return.

4. Your spouse is from Canada, moved to US in October 2024 -- need info ---

                 (a)  Citizenship;

                 (b)  if not US person ( defined above ) then with which visa; 

                 (c)   her tax home during the last three years i.e. 2024, 2023, 2022;

                 (d)  does she have US tax id --TIN   ( SSN / ITIN / ? ) if any  ;

   Generally, and assuming that your spouse entered US on a visa ( K or H or ??) and  she wants  to be  treated as a resident for the tax year, you  both have to request to be allowed to treat her as a resident for tax purposes. Note that  this  implies  ( in addition to MFJ standard deduction ) that   

               (A) her world income (for the entire tax year) is subject to US taxes  ( federal and be extension the State);  any income taxes paid to a foreign taxing authority is eligible for foreign tax credit / deduction or depending on the exact facts and circumstances possible  earned income exclusion.

               (B)  FICA/SECA taxes also come into picture ( Totalization agreement would allow one to choose which jurisdiction is paid into );

              (C)  FBAR ( form 114 at FinCen.gov)  and FATCA ( form 8938 with return ) filings may be required.

I will circle back once I hear from you with answers to my questions.  

[Opus 17]

@pk 

@user17597544422 

"2. Absent any additional facts, your world income is US sourced and NJ sourced ( work performed  in NJ)."

Just to note also the taxpayer is working remotely for an NY company.  This subjects his NY income to the "convenience of the employer" rule and he may be required to file a NY non-resident return as well.  This non-resident return would only report the taxpayer's NY-based income, and other NJ income and not the spouse's income (from anywhere).  So the spouse's residency does not impact the NY non-resident return, but it is another bit of paperwork that needs to be completed and another check to be written. 

[user17597544422]

@pk @Opus 17 Thanks for helping me.

1. I’m not a U.S. citizen but am a resident for tax purposes on an H1B visa
2. 4.cMy spouse is a Canadian citizen who entered the U.S. and established NJ domicile starting October 2024. My spouse had Canadian-source income from January to July 2024 (before moving).
3. 4.b Spouse is on an H4 visa,
4. 4.c residing in Canada before October 2024.(last 3 years)
5. 4.d Spouse does not yet have an ITIN, but I applied for one with my federal MFJ return, which is still processing.

Haven’t complete fatca yet yet

I already filed my federal return MFJ, and now I’m working on my NY and NJ state returns before October 15. I haven’t received itin yet

1. New York (NY):

• I’m filing as MFJ but as a nonresident, since we didn’t live in NY.
• NY seems to calculate tax based on worldwide income of mine and my spouse’s, but I only included my NY W-2 income when I did the allocation and didn’t include my spouse or any investment income ; the tax rate used appears to be based on our combined worldwide income, which increases the effective rate.
• Is that how NY nonresident calculations normally work  i.e., using the full federal income to determine the rate, even though only NY income is taxed?
• ny I filed an extension and they gave a temporary number for my spouse im planning on applying using that. Is that ok?

2. New Jersey (NJ):

• I’m considering MFJ because of NJ’s lower tax rates when filing jointly and since federal was applied using mfj .
• I’m including my full income plus investment income from us and worldwide for nj;
  My spouse started NJ domicile in October 2024.
• Should I include her full 2024 income (including Canadian income before October) when filing NJ MFJ, or only U.S. income after NJ residency began?
• NJ gives a credit for taxes paid to NY on NY-source income, but since NY was overpaid by over $1.5k, I’m not sure how that affects the credit computation 
• since I don’t think I’ll get itin on time before October 15; I’m thinking of attaching form w7 to apply. Is that ok?

[Opus 17]

@user17597544422 

NY is going to look at your total income to figure your tax rate and apply it to the NY income.  In other words, if the NY income alone puts you in the 4% bracket, but your total income would put you in the 7% bracket, NY will charge you 7% tax.

NJ: Since you already filed federal MFJ, you have no choice but to file NJ MFS and declare all your combined worldwide income.  

You should have included your spouse's world-wide income on your federal MFJ return.  If you did not, that return is wrong and needs to be amended.  If you did include your wife's world-wide income, it should automatically flow to the NJ return in Turbotax.  (If you are filing manually without software, then yes, you must include all your wife's world-wide income--because you were domiciled in NJ the whole year and you are filing MFJ, she is considered to have been domiciled in NJ the whole year.

NJ should give a credit for the actual NY tax amount.  In other words, if your NY withholding was $5000 and your tax is $3500, you will get a $1500 refund from NY, and NJ should give you a credit against the $3500 (the amount of actual tax, not the amount of withholding).

[user17597544422]

@pk @Opus 17  thanks

my wife still hasn’t gotten the itin 

for NJ when I do paper filing, can I just write “applied for itin” under spouse SSN and paper file?

for NY when I applied for extension, my wife got a temporary number. Wondering if after printing NJ return, I can add in the temporary number for my spouse under SSN in the software and efile NY or should I paper file NY as well and write “applied for itin”?

[Opus 17]

The New Jersey instructions say that if you have applied for an ITIN and not received it yet, attach a copy of the W-7 to your NJ return.  

Another option--if you are expecting a refund from NJ-- is to hold off filing the return until you get the ITIN back from the IRS.  Penalties for late filing are based on what you owe, so if you are expecting a refund, there is no actual penalty for filing late.

The NY temporary number won't mean anything to NJ. 

[user17597544422]

@Opus 17  thanks. How about NY? Can I paper file and just leave ITIN blank or should I attach w7 ? I have a decent amount of refund I’m expecting from NY 

[Opus 17]

---

@user17597544422 wrote:

@Opus 17  thanks. How about NY? Can I paper file and just leave ITIN blank or should I attach w7 ? I have a decent amount of refund I’m expecting from NY 

---

You said you got a temporary number from NY, did that come with rules or instructions?  If the rules say you can't file with a temporary number, then you probably need to wait for the ITIN, even though you will miss the deadline.

[user17597544422]

@Opus 17 Yeah the temporary number was for the extension I filed. If I have to wait until after getting itin would there be any penalty if I file after October 15? I don’t owe any money, I’ll be getting a refund