Worked in same state all year, but lived in two states. How to enter the W-2 info?

[starfisht]

I had the same job all year in NY city. I lived in NY city for the first nine months then moved to NJ.

I received a two-page W-2, one has a NJ State Wage and Tax statement and the other has a NY State Wage and Tax statement and a City Wage and Tax statement.

Is there a way to go a TT section which will walk me through, step by step, a situation like this?

[SharonD007]

Yes, TurboTax will walk you through filing state tax returns for each state. You will have to file part-year resident state tax returns for both New York and New Jersey.  Follow the steps below to file part-year resident state tax returns for each state. Enter both W-2s exactly as they are.

If you've already entered your personal information, review your entries to help ensure that TurboTax will help you create the correct part-year tax returns. 

1. Open TurboTax and select My Info
2. A Personal info summary screen will pop up
3. Select Edit by your name
4. Scroll through the screens to ensure that you have the correct answers for your state of residence and choose that you lived in another state. A new section will appear asking for your previous state of residence. Select the other state that you lived in.
5. Scroll down to Other State Income and select Edit
6. Check your answer for Did you make money in any other states? Answer the questions and select Continue.

After you complete your federal tax return and you move to the State Taxes sections, both of your part-year state returns will be listed.  Prepare the state that you moved from first (New York) then the state that you live in (New Jersey).

 ‌Review the TurboTax articles: How do I file if I moved to a different state last year? and How do I file a part-year state return? 

[starfisht]

Thank you Sharon.

I completed my NY return. I am now at the screen in the NJ return where TT asks says "Tell us about the money you earned in New York". It wants to know: "the double-taxed income while a resident of New Jersey" and the "Tax paid in New York". 

In the NY return I divvied out the interest, dividend, and cap gain/loss income between the states based on the percentage of the year I lived in each state (70% NY/30% NJ).  But I reported 100% of my wages in the NY return because the NY W-2 reported all my wages in state wages box 16 and taxed all of it. 

Can I assume that the "income" in this screen refers to wages?  How do I calculate "the double-taxed income while a resident of New Jersey" and "Tax paid in New York"?  I guess a related question is how much wages should be reported in the NJ return? (The NJ W-2 has a number in state wages. I don't how they determined it. It's about 12% of my annual wage. The state income tax box is almost nil.)

[DMarkM1]

Yes.  So far you have entered correctly.  Now TurboTax wants to help you claim a credit for taxes paid to another state.  In the NJ return when asked about the "double taxed income" that amount is only the wages earned in NY while you were resident in NJ.  That is true because you already allocated the other income sources according to your residence.  

Since you used 70/30 as your residence proportion, apply the same to the wages earned in NY; so 30% belongs to NJ and was double taxed. 

The other figure you will need is the actual NY tax on that double taxed income.  That amount is not available in TurboTax since your situation is not typical of part-year returns.  Normally, when someone moves states they change jobs so there is no overlap of taxable income.   In your case you have income that does not overlap (interest/dividends) and some that does (wages) and you only need the tax on the overlapping wages.  

You can, however, calculate that number using your NY Tax Summary (see below).   On the NY tax summary divide the NJ wages that your figured earlier by the NY taxable income.  Multiply that result by the NY tax liability.  That will be the NY tax on the NJ wage portion. 

Now you can claim a credit on your NJ return for taxes paid to another state.    

1. Select "Tax Tools" in the left hand menu
2. Select "Tools"
3. Select "View Tax Summary"
4. Select "Preview My 1040" in the left hand menu

5. Select "NY Tax Summary"

[starfisht]

Thank you so much.
Please confirm this summary:
In the NJ return, 30% of my total wage (NJ wages) goes into the box labeled "Double-taxed income while a resident of NJ".
On the same screen, the "Tax paid to NY" is calculated as (NJ wages/NY taxable income) x NY total tax liability.
Based on those two figures, TT then comes up with "Credit for tax paid to NY". It's about 20% of the "Tax paid to NY". Not sure how TT calculated that credit.
Does that look right?
In the NY return, I allocated 70% of my income, including wages, to NY.

Just one other question. You may not have an answer for this but my W-2's are puzzling.
1) In previous years, my NY W-2 had exactly the same wages for both the state and NYC. That made perfect sense. This year the NYC wage is about 12% less. That makes no sense to me.
2) In the NJ W-2, the state wage box (box 16) has about 13% of my annual wage. I have no idea where that comes from. Of course, I entered that figure into TT as the W-2 info so the New Jersey return calculated my NJ tax liability based on that figure, not the 30% of my total wage. Obviously that works to my advantage but I'm concerned that something is not right. Box 17 has only 35 cents.

[DMarkM1]

Yes to your entries for the credit for taxes paid to another state on your NJ return.  However, the credit could be a bit low and this relates to your final question about the NJ withholding and income allocation. 

The NJ tax was figured on the amounts allocated to NJ.  The box 16 amount in the NJ line on your W2 is what your employer attributed to NJ and withheld taxes on which also limits what you can allocate to NJ.  Since 30% should have been the correct NJ wage amount, you should correct the NJ box 16 amount in the federal "Wages & Income" section by editing the W2. Correct the box 16 amount and leave the box 17 as reported.  

In the NJ interview in the "Income" section you can click through to a screen titled "Tell us about your NJ income".  It will show all your NJ box 16 W2 wages and present you a box to enter the amount of that total wage that actually belongs to NJ.  That box 16 amount is the maximum you can enter in that NJ allocation box.  Since 30% is correct you can enter the whole amount there. That will be the allocation to NJ on which your NJ tax is based.  

This may also update the credit for taxes paid to another state since you have now increased the NJ wage allocation, but it also factors in what the NY tax on that income was.      

On the W2 questions, you left NYC but continued the NY state job so the income taxed by those entities will be different. 

[starfisht]

As you suggested, I corrected the NJ box 16 amount. It went from my employer attributed amount of only 12% of my annual wage to 30%. That significantly increased the tax credit on the NJ return but increased the NJ tax liability even more significantly, so the tax due went from 0 to sever hundred dollars (A small part of that tax due is interest for underpayment of estimated tax from the beginning of the year. I didn’t even know I would move to NJ until late in the year.) The tax owed to NJ is only a small fraction of the lower NY tax liability due to the 30% allocation to NJ.

I corrected the NY W-2 box 16 amount. It went from 100% of my annual wage to 70%.

I see that, in Forms mode, the Alloc Wks has, on income line 1, the 70% wage figure in the column for NY State Resident Period. It has the 30% wage figure in the column for Nonresident Period income. In the next column it attributes all of the nonresident income to NY sources. What’s confusing is that the main NY tax form (IT-203) is is reporting 100% of my annual wage on line 1. Is that correct because NJ is giving me a a tax credit on 30%? Or should the figure be the 70% that I put into the NY W-2 wage box 16?

As you can tell I’m still not totally clear on this situation. I appreciate the help that you have given me that has enabled me to get this far. I have always done my taxes successfully using Turbotax, but this year, because of the NY/NJ situation, I don’t feel completely confident that I have done everything right. I don’t want NY and/or NJ giving me a problem later on. Forms 1040, A, B, and D are correct. Is it possible to hire an accountant to just to review my return specifically regarding the state entries related to the NY-NJ move? I can wait until after April 15 if necessary.

[AmyC]

Yes, we have live experts that can review your return. See What is an Expert Review and how can I schedule one?

I answered a question with a NJ/ NY situation similar to yours. You may want to view my answer with the state rules and documents here.

[starfisht]

Given my situation, about how much would Turbo Tax Live Assistant cost?

[DMarkM1]

The product will likely be Deluxe Live you'll pay the difference between what you already paid and what the upgraded product cost.  Here is a link with more information.  

Also, NY will be taxing you on all the income earned working at the NY job.  So 100% of the NY income on the NY form is correct.  You are just getting a credit on your NJ return to mitigate the tax paid to NY only on the income double taxed by NY and NJ (working in NY while resident of NJ - the 30% of wages figure). 

If your employer only had NJ taxes withheld on a small amount of wages, when 30% of wages should have been taxed, then you will likely owe NJ taxes.