NJ Full Year Resident - NY Wages

[Yardley CPA]

I'd like to clarify my understanding of credit for New Jersey's Credit for Income Taxes Paid to Other Jurisdictions.   NJ Full Year Resident working in NYC.  NY Wages reflected on the W2 were $81,266.

I 've attached a section of the NY-IT203 below along with the NJ Credit form.  In the example below, i am using the income reflected on Line 37 of the NY IT-203, $83,727, New York Taxable Income,to calculate NJ's Credit.  Is this correct or should I be using the $81,266?

 

 

[FDNY]

The amount of income taxed by other jurisdiction should be the 81266 because that is the amount of income from NY that is taxed by NY, hence the credit for taxes paid is 4491.  The 91727 is the divisor because it is the federal gross income used to arrive at the allocation of NY income tax.  So, .886 Allocation % X 5069 Base tax = 4491.

The number you should be seeing on the pervious page column of NYS income line 31 should be the 81266.

I hope this is clearer than mud.

[Yardley CPA]

FDNY...thank you.  the issue I'm having is the term "NY Taxable Income" on line 37  The NJ form asks for the Income Taxed by NY, so that's why I thought it would be the $83,727.  With that said, NY wages on the W2 only amounted to the $81,266...so i guess that has to be the limit on the amount subject to tax.  I appreciate your input. 

12 minutes ago, FDNY said:

The amount of income taxed by other jurisdiction should be the 81266 because that is the amount of income from NY that is taxed by NY, hence the credit for taxes paid is 4491.  The 91727 is the divisor because it is the federal gross income used to arrive at the allocation of NY income tax.  So, .886 Allocation % X 5069 Base tax = 4491.

 

[FDNY]

I know, that term is confusing.  It is what the NY taxable amount would be for gross income less standard or itemized deductions and any dependent deductions which is used to arrive at the base tax used to apply the allocation %.

I do about 6 of these a year and have to think about it each time.