Double Taxation - New York and New Jersey

Question

I have a tax situation for year 2022. Amounts given below are examples.

• 1/1/2022 to 8/8/2022: living and working in Indiana (income $55,000)
• 8/9/2022 to 12/31/2022: living in New Jersey, working in New York (income $45,000)

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• Total income: $100,000
• IN income: $55,000
• NJ income: $45,000
• NY income: $100,000 (because, New York requires all income to reported on W2)

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I filed for NY non-resident tax. After standard deduction, NY will calculate tax rate based on $90,000. NY tax becomes $3000. Since I didn't earn all of income in NY, the final NY tax becomes 3000x(0.4 income factor) = $1200.

Problem

While filing for Part-year resident NJ, it asks for NY income:

• How much of your income was double-taxed while being a resident of NJ?
• How much NY taxes did you pay?

Questions

• What's my double-taxed income? Is it $45,000 or $90,000 x 0.45 or something else? I am confused because NY considered Indiana income too.
• How much NY taxes I paid to get correct NJ credits? Is it the total amount $1200 or a fraction of $1200?

Answer 1

Your doubly-taxed income was $45,000, which is the amount of income that is taxable in both New York and New Jersey.

The amount of New York tax you paid on that doubly-taxed income was $1,200. Basically, the only income that was taxable in New York was that $45,000 of doubly-taxed income; therefore, the amount of New York tax on the doubly-taxed income is the total amount of New York tax paid, i.e. $1,200. The same is true of your New Jersey tax -- the only income that was taxable in New Jersey was that $45,000 of doubly-taxed income; therefore, the amount of New Jersey tax on the doubly-taxed income is the total amount of New Jersey tax paid. And you get a credit equal to the lesser of the two taxes.