Income Taxed in Another State--Which figure to enter Box 1 or Box 16.

Forum|Forum|1 year ago
March 21, 2025
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Quick query: I work in NJ but live in NY state. My income is from NJ and is taxed there. When I file the NY Tax return it asks: What portion of your income is taxed by New Jersey. I have the NJ W2 and it lists

Wages in Box 1

and in Box 16 State Wages. This number is higher as it includes monies that were directed to retirement 403 B acounts. Do I enter the "Amount Taxed By NJ" in Turbo Tax the amount listed in Box 1 or in Box 16. It makes a difference in terms of the amount of tax.

Thanks!

Not A Product Question

Best answer by DianeW777

But -- since NJ taxes the line 16 amount, isn't that the correct amount to enter in the above area shown in the photo? I.e. the higher number? thanks

No. NJ taxes wages differently than NY so for the NY return enter only the income that would be taxed by NY.

The credit you receive is the amount of NJ tax or the tax NY would charge on that income under their rules. The fact that NJ taxes a higher amount of wages than NY, does not affect the amount that should be taxed by NY but it will affect the amount of credit you are allowed to receive. The credit is the lesser of what NY would charge in tax or the amount NJ does charge in tax.

It can be a usual-unusual situation because of the way each state handles the contributions to a 403(b) plan. However, it is my belief that NY would not willingly give a higher credit than what they would charge for these same wages which would be allowed a reduction for the contribution if it were handled in their state versus NJ. I don't see this specifically in writing so I'll let you be the judge on what to enter. This could be a nonissue since it's likely the NY state tax would be higher in general.

Income Tax by State: Which Has the Highest and Lowest Taxes?

@tanalin

AmyC

Employee

Neither box is used. Look at your NJ return and locate the taxable income and tax liability.

To locate your taxable income and liability for NJ

Log into your return
Select state taxes
Enter the non-resident NJ for which you need the liability
On the left, go to Tax Tools
Select Tools
Select View Tax Summary
You will see Summary of your NJ Return at the top.
Locate the line for taxable income
Locate the line that says Total Tax
Note those two numbers
Return to your resident NY return
Enter the correct number when asked

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tanalinAuthor

hi and huge thank you. But i don't have the online version only a paper version.

Wd the taxable income be box 27, entitled Total Income on the NJ NR return? the bottom line on the form. I can't paste the doc in here but the link is here: I only have an entry for line 15 and 27 is the same amount.

https://www.nj.gov/treasury/taxation/pdf/current/1040nr.pdf

thanks again