I am a tax resident in NY, work in NJ, hence NJ non-resident
1) Do I need to report interest, dividend, other income in NJ state return, these have already been reported in Federal and NY state return. These are typical bank, investment interest etc. Not sure if this is considered "NJ source".
2) I know NJ state wages are typically higher than NJ state or federal. But even if I take in consideration that difference in these wage difference, the "New Jersey taxable income" is significantly higher.
a) How do you derive "New Jersey taxable income", even if I add things like interest, dividend, other income (which i dont think I am supposed to) + the higher NJ wages, the amount is still much higher in Turbox tax.
b) The pre-populated wages for question on "Did you earn all of your wages in New Jersey?" does not equate to the line "New Jersey gross income".
3) When completing my NY state return, I get en error saying Tax Amount TP should not be greater than the tax imposed by other state. This amount is the tax paid on my NJ state return.
No, do not report any income except your New Jersey wages on the NJ-1040NR nonresident return. New Jersey, like most other states, uses total income to set your tax rate. As a result, you will see all your income in Column A (Gross Income Everywhere). However, you are only taxed on Column B (Amount from New Jersey Sources).
This Column A amount is “New Jersey gross income.” There are no additions, so this number should be approximately NJ wages + interest, dividends, etc.
New Jersey subtracts exemptions and deductions from this amount to arrive at Taxable Income. That’s the amount that would be taxed by NJ if all your income were earned in NJ.
Your actual tax is the NJ percentage of the tax on taxable income.
For example, if you earned $100,000 everywhere and $50,000 in NJ, then your NJ base income would be $100,000 and your tax would be half the base tax. Suppose the NJ tax on $100,000 is $10,000, then your NJ tax is 50% ($50k/$100k) of $10,000 or $5,000.
We’d have to see your return to tell you why gross income is higher much higher than the total of all your income. Sometimes this happens if you have a NY and NJ wage line on your W-2 and did not tell TurboTax to disregard one income.
The error on your NY Other State Credit is probably due to this income mismatch on the NJ return.
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