Question

One Spouse Has NonResident Income - NJ/NY

Forum|Forum|3 years ago
March 25, 2023
1 reply
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Hello,

We live in NJ. 100% of my husband's income is NJ. 50% of my income was in NY in 2022 (job change). When calculating the NY State Taxes - why do they base it on our combined federal income? They are saying we owe NY State $X, which is very close to what I already paid. They are also saying I owe a $500 NY State penalty. Why is this showing our combined income if only 1 spouse had NY State income?

DMarkM1

NY does use all income from all sources as part of a ratio to determine the NY tax on NY source income. Generally, the formula is NY source income/all income = ratio. Multiply the ratio by the tax on all income to arrive at NY tax on NY income.

Having said that, you do need to ensure that only income that is NY source is allocated to NY so that the ratio is correct.

Click "Your state returns" in the left hand menu
Be sure NY is listed as a nonresident return
Continue
If NY is not nonresident "Update" the "General Information" section and "Change Residency."
"Update" the "NY Income Allocation" items to verify only NY source income is allocated to NY with zeroes to NY in the other categories

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