# Double Taxation - New York and New Jersey

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`)

• 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)

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`?
• To clarify, you mean that the income that you were subject to New York tax on was \$45,000, but the rate of New York tax was calculated based on your worldwide income (\$100,000). Is that correct? Sep 30 at 3:20
• @user102008 that is correct
– sam
Sep 30 at 3:35

## 1 Answer

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.

• One additional complication: what if NY income is \$44,500 and NJ income is \$45,000? NY income is \$500 less because of Cafe125 employee benefit. I think in this case, double-taxed income is \$44,500. Am I correct? I didn't add this in original question for simplicity.
– sam
Sep 30 at 3:41
• @sam: I believe you are correct Sep 30 at 6:48