Part time resident- NY state is taxing all my full federal income even though I was only a part time resident and also paid NJ taxes.

Forum|Forum|1 year ago
February 24, 2025
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My tax situation is a little complicated, but basically I lived in Masachussets and New York this year- I lived and worked in Masachussets for 3 months, and then moved to NY, where I commuted to a job in NJ for 6 months and then switched to a job in NY for the last 3 months. I've gotten through my state taxes for MA as a part time resident and NJ as a non-resident, and both went fine with me being able to allocate the appropriate income as earned in the appropriate states. Now that I'm doing my NY state filing, I've gone through the activity of allocating the income I earned in NY, but at the end of the state filing, it's showing that I owe taxes based on my full income, including what I earned out of NY. I've restarted my filing a couple of times to make sure there were no typos. Any idea how I can fix this/what could be the issue?

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Best answer by KeshaH

So is there no way to go about fixing this with the online version?

There are two things that will happen on your NY return.

1. Your tax liability will be calculated based on your income for the whole year. Then, an income percentage will be applied to that tax liability to prorate your tax based on how much income you earned while a NY resident.

To calculate the income percentage, you will need to allocate the income you earned during the year between your non-NY period and your NY period. Allocate all income earned while you lived in NY to NY, even though you worked in NJ. This income is taxable to both NY and NJ.

2. Your prorated, NY tax liability will include tax on the same income that's taxable in NJ. You'll get a credit in NY for the tax that you paid in NJ.

To make sure this credit is calculated properly, you'll need to click Start or Edit next to Tax Paid to Another State on the Take a look at New York credits and taxes screen. You'll see a screen asking if you'd like to calculate the credit. Click Continue. On the next few screens you'll enter information about your NJ income (if it's not already populated) so that TurboTax can calculate your credit.

BillM223

New York is one of those states that taxes you everywhere but gives you a tax credit for taxes paid to other states. This is very common for NY/NJ situations where you live in one and work in the other.

In New York State, this is called the "New York State Resident Credit". Look for this on your NYS return, to see if you got credit for MA and NJ taxes. Ditto with the other states.

It will look like NYS is taxing everything, but you should be getting credit for taxes paid to other states.

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LH95Author

Hi BillM223-

Thanks for you response! Where can I see those credits? Right now, I am getting a refund in both NJ/MA, but at the end of my NY filing, it's showing that I owe a large amount (and am at risk of an underpayment penalty)...