Question

Wife and I live in NJ, I work in NJ, she works in NY - NY Taxes our cumulative income?

Forum|Forum|5 years ago
March 5, 2021
1 reply
0 views

Hi,

Situation: my wife and I live in NJ. I earn all of my money in NJ, whereas my wife works in NYC.

Question: I wanted to confirm if it is indeed true that that when filing the return of NY, it taxes the cumulative income versus only what was earned in NY (my wife's income)?

Follow-up question: when applying the NY taxes paid as a credit to NJ income state tax, is it still based off of the cumulative salary figure or just the income earned in NY.

Thanks,

Adam

Not A Product Question

AmyC

Employee

NY calculates the tax liability on the full income and then prorates it for the portion earned in NY. You only pay taxes on the NY earned income, it is just taxed at the highest rate available for your full income.

NJ will tax your actual income for the year and give you a credit of the lower of NY or NJ tax for the NY income.

Please carefully follow these directions. You will need to prepare the states in a special order. You may need to delete both states and begin again.

First, prepare your non-resident return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
THEN prepare your resident state return and it will generate a credit for your income already being taxed in the non-resident state.
The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"