If you live in New Jersey and work in New York, you’ll have to file a tax return for each.
The state of New York requires you to pay taxes on income you earned working there, even though you live in New Jersey.
You must report all your income on your New Jersey return. However, you will get a credit for the taxes you paid to New York.
You will need to:
- Prepare a "non-resident" return for the state of New York. You will only report the income and withholdings relevant to that state.
- Prepare a return for New Jersey. You will report all of your income, regardless of where you earned it.
- Be sure you receive a credit for taxes paid to New York on your New Jersey return, so that you won't get double-taxed on the same income.
TurboTax will help guide you.
How to file a non-resident tax return for New York
First, make sure TurboTax knows that you need to file a nonresident state return:
- Click the Personal Info tab, then scroll down to the Your Other State Info section and click Edit.
- Select the appropriate option on the screen Did You Live In Another State? (Most people will select the second option, "No".) Click Continue.
- Answer Yes on the next screen Did You Make Money In Any Other States?
- On the next screen, select New York.
- Click Continue. You will return to the same screen you saw in Step 1, and when you scroll down you will see New York state listed next to the line "Received Income From."
When you get to the State Taxes tab, the program will show you the states you need (New Jersey and New York), based on what you entered in the Personal Info section. Make sure you prepare your nonresident New York return before your New Jersey resident state return, to ensure proper calculations.
For more information, see How do I File a Nonresident State Tax Return?