NJ State Tax Question

[zachc86]

Hello, I am trying to figure out my NJ Tax Return. My wife and I filed a joint federal return, which means we will need to file a joint NJ return. I lived and worked in NJ for part of the year, then once my wife and I married I moved to PA and continued to work in NJ. My wife for the entire year lived and worked in PA. I understand that I will need to report the income I earned while living in NJ, but do I need to report any of my wife's income as well? Again, she lived and worked in PA for the entire year but we will need to fill out a joint NJ return because we filed our federal jointly.  

[LenaH]

No, your wife's income is not taxable to New Jersey. Since you were a part-year resident and also received income from New Jersey sources during your period of nonresidence, you will file a NJ resident return and a NJ non-resident return. 

On the screens of the New Jersey return(s), you will get to allocate your portion of income as a New Jersey resident. Do not include your spouse's income in the allocation. You will also get to allocate the portion of income you earned in New Jersey when you were a Pennsylvania resident. 

I completed a mock-up return with your scenario. The spouse that lived in NJ for part of the year made $100,000. Spouse 2 made $75,000. On the screens of your New Jersey return, you will see a screen, Tell us your income while living in New Jersey. In this box, include only your income earned while you were a New Jersey resident. I entered $40,000. Please see the screenshot below.

The next screen, Tell us your New Jersey income while living outside New Jersey, you will enter the remainder of the income you earned in New Jersey (as a nonresident). You will notice the amount to allocate decreased by $40,000 and is now $135,000. Please see the screenshot below. 

On the screens that follow, you will get to allocate any other income you may have based on your period of residency. 

[zachc86]

Thank you for the reply. My only question now is about the non-resident return. Since PA and NJ have a reciprocal income tax agreement, I was led to believe that I would not have to file a non-resident NJ return since the compensation is taxable only to the resident state. @LenaH 

[MaryK4]

Yes you are correct, you would only have to file the resident New Jersey for the part of the year you lived there then can report the NJ income on your Pennsylvania return. @zachc86