NY Non-resident Allocation

Your wages are outside of New Jersey since you work in New York.

TurboTax will properly allocate your wages between New York and New Jersey.

New York taxes wages that were earned in New York State.

New Jersey requires you to pay tax on all of your income, regardless of where it is earned.

New York collects taxes on the income you earned while working in New York state. This income won’t be double-taxed because New Jersey gives you a tax credit for taxes paid to other jurisdictions.

This credit reduces your New Jersey Income Tax liability so that you don't pay taxes twice on the same income. However, this isn’t a dollar-for-dollar refund of the taxes you paid to New York. Per the State of New Jersey, your credit can't be more than the amount you would’ve paid if you earned the income in New Jersey (rather than New York).

Once you've determined that you need to file a nonresident state return, the first thing you want to do is make sure you've filled out the Personal Info section correctly:

1. With your return open, select My Info in the menu.
2. On the Personal info summary screen, scroll down to Other State Income, and select Edit.
3. At the Did you make money in any other states? question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
4. Select Continue to return to your Personal info summary.

After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.

To ensure accurate calculations of the credit on your New Jersey return, always complete the nonresident New York return first.

Follow these instructions to compute the other state tax credit for New Jersey:

1. Open or continue your return.
2. Select State Taxes, Prepare State from the left menu, then select Start next to your nonresident New York return.
3. Answer the interview questions and allocate your wages and/or self-employment income earned in New York State.
   1. On the New York Income Allocation screen, answer Yes if all of your wages were earned in New York or answer No if only some of your wages were earned in New York.
   2. If you answered No, the next screen, Your Form W-2 Summary, will show your W-2(s). Select Edit and adjust your NY income by allocating by days or percentage.
4. Allocate any deductions that are attributable to New York. If none, enter zero.
5. Continue through the interview questions until you reach the Let’s Review Your New York Numbers screen.
   1. Take note of the Amount Taxed by New York State, as well as the Allocated NYS Tax amount.
6. Select State Taxes, Prepare State, from the left menu, and start your New Jersey resident return.
7. Continue until you reach the Summary of Taxes Paid to Other States screen. The credit amount for your New York taxes should be listed here. To view or edit this amount, select Edit.
8. On the Tell us about the money you earned in New York screen, you should see your double-taxed income and any amount of tax paid to New York.
   1. Note: The tax amount won't be the tax withheld from your W-2. It'll be the tax you were liable for on your New York return.
   2. If there are any differences from what you noted in Step 5a, enter those amounts under the column Amount if Different.
9. On the following screen, we’ll let you know your credit amount for tax paid to New York.

Click here for information on how to file a nonresident state return.

Click here for additional information on filing when multiple states are involved.