Since you are a New Jersey resident, all taxable business income you receive reported on a Form 1065, Schedule K-1 from an LLC is taxable in your state. Based on the boxes that income is reported in, which most likely will be Box 1, 2 or 3 in the top center of the form, will dictate how this income will be taxed. While it is unknown how you are participating in this business as an active member in making daily business decisions or a passive member, where only your capital investment is at risk of loss, Box 1 would usually imply this is ordinary income to be taxed at regular income tax rates on your Federal and State Tax return. If you are reporting a Net Loss, those are not deductible on the New Jersey Tax Return, as it is a Gross Income Tax State and those losses would be deferred into the future on your Federal and State Tax return, unless you are reporting passive income. Since the State of Texas does not have an income tax, there would be no tax payments or deductions to benefit from on your state tax return. The only unknown is whether this LLC in Texas is being treated as an S-Corp and any income would be reported on a Form 1120-S, Schedule K-1. More information would be needed, but for the most part, the program would normally know what to do, which would require you to have supplemental pages from your Schedule K-1 for the State of New Jersey to state how to "fill in the blanks".
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