Remove these wages (Work in NY live in NJ)

[claysyankees12]

"Lets Confirm Your Taxable State Wages": I am supposed to check "remove these wages for NY or NJ or neither to go on to the next step and I am confused what to do. The language isn't as clear what I am supposed to check or not check if I live in NJ and work in NY, do I check a box, if so which?

[JohnH2]

Which state return were you working on when this question came up?

[claysyankees12]

NJ

[pa20297]

I have the same issue, How do I proceed

[mc_c5afd1e1-5f80]

similar question has been answered here - <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3098124-question-on-nj-state-tax-i-live-in-nj-and-work-in-ny-i-hav...>

In my case - It seems to double count the income since W2 says NY state wages is same as Federal and I do not have any income from NJ - If we proceed without removing, it seems to add up NY state wages and NJ state wages - leading to a higher wages together. Not clear what should be done

[maglib]

@mc_c5afd1e1-5f80
When you complete the NY return first, when you start NJ it will ask about the income and you have to click to remove the NY wages w-2.  You will then get a credit for taxes paid to NY later in another section of the NJ interview.

[maglib · Accepted solution]

In the federal interview for personal info section. Answer the question did you earn wages in another state. Answer yes unless it is a reciprocal income tax state (https://ttlc.intuit.com/questions/2895760-which-states-have-reciprocal-agreements) and list the states.

In NJ  return  interview there will be a point in the interview that you have to select to remove the NY W-2 or it will double count the income..(note removing the NJ can also be done but will lead to a lot of adjustments for after tax in NJ items that are pretax for other states and the fed) that are  so check to remove the NY wages (you always remove the state you don't reside in wages unless your w-2 didn't report income to your resident state).  Box 15 on your w-2 should have 2 lines with the same employee state id number.  and box 16 and 17 will differ for each state but you should only enter the w-2 in once....
NJ number will be higher as NJ taxes healthcare benefits.  NY number normally matches federal number.
Because NY and NJ reporting are different amounts TT is just wanting to be clear that it wasn't 2 separate activities.

Make sure you finish your non-resident state return prior to starting your residence or the credit for taxes paid to other states calculation will be problematic.  Dont forget that income for dividend, interest, cap gains, should be removed from the NY column when doing the NY return as those income items are only resident state (exceptions may be for stock options earned income may be allocated to work state).During the NJ interview you will get a credit for taxes paid to NY in a separate part of the interview, do note the income taxed by NY and NJ are calculated differently and the tax rates are not the same so you will not get a full credit).  States tax you at the rate as if all income was earned there and then credit you for the actual earned there/total income so you pay a higher rate but only on the % of income earned there.

In the NY interview, you are a non-resident and it starts with Federal income...  it should not pick up the NJ amounts.

I am not a TT employee.Was this helpful?

[zakir-hussain]

removed

[maglib]

You live in NJ and get taxed on NJ on all income and NJ is a different calculation than NY as NJ does NOT allow certain deductions that NY does.  You will get a credit for taxes paid to NY which is a separate  part of the interview.... You must first complete your NY return and only then complete NJ. NJ taxes healthcare benefits.  (TT will work if you remove NJ too but then you will have to input all the income taxable to NJ that isn't taxed to NY such as Healthcare, vs if you remove NY wages in the NJ prep, it will already be done, saving you time).

[josednolasco]

This is confusing...some folks say uncheck NY and others say uncheck NJ...wonder if TT has an opinion on this

[maglib]

In NJ, you don't get deductions that Fed and NY allow.  The income for NJ will always be the larger number, you  remove the NY wages.  You then get credit for taxes paid to other states, which TT does automatically and it will be the wages from the IT NY forms adjusted, a completely different number.  If in NJ you remove the wrong wages, you will have to adjust the NJ income and add back all the deductions not allowed in NJ such as healthcare, vs. if you remove the NY during the NJ interview, you will save that step and know you started with the correct income.

[maglib]

Note this is only for the same w-2....  NJ taxes health care, NY doesn't so if in NJ resident return, you remove NJ, you will underreport your NJ wages and the NJ state will send you an invoice, normally 3 years later...or you would have to make sure you answered the interview and add back the those deductions adding another step.

[maglib]

Most states start with Federal income and adjust deductions....

[Midge121]

So, when doing the NY non resident return and it asks if all income was from NY, should you answer yes since TT is only pulling in the NY w2? If I put no, it asks me how I can up with the allocation when the company sent me 2 w2 forms. One NJ income and one NY income.

[KrisD15]

Answer "Yes"but make sure only that income amount is showing on the final New York state return.