New York City form 1127

[user17730656089]

I work as a NYC government employee, but live in New Jersey. I am required to file NYC form 1127 for city taxes for non residents. When using Turbotax 2025 deluxe to do New York State taxes, it also does the NYC form 1127. However, when it does the 1127, it includes my income from capital gains, interest, and taxes to calculate my New York City tax obligation. Aren't income from those sources not to be counted in the New York State and therefore NYC tax forms since I am a New Jersey resident? New York State form IT-203 eventually accounts for this, but in NYC form 1127, turbotax uses my federal income for calculation purposes. Should I account for this by manually filling out NYC form 1127 and entering my New York State income less capital gains, interest, and dividends? As I said earlier NYS from IT-203 eventually takes out these sources of income, but NYC form 1127 requires you transfer the NYS income line before the adjustment is made for tax calculations? Any help is appreciated. Thank you.

[RobertB4444]

No, it isn't wrong.  And it is a little annoying.  New York takes your entire income and figures the tax on that as though you were a New York resident.  Then it figures out what percentage of your income was New York income and takes that percentage of the tax charged.  

Some states figure out your taxable income and then only tax that.  The tax rate is lower if you do it that way.  New York does not.

Although, to be fair, New Jersey does it the same way.