If you're a New York resident who works in New Jersey, it's common for your Form W-2 to show wage information for both states. Because New York taxes residents on all income regardless of where it's earned, and New Jersey taxes income earned within the state, you'll often need to file returns in both states.
In some cases, the wage information reported in Box 16 of your W-2 can cause your New Jersey return to pull in more income than it should.
Why Is My New Jersey Income Incorrect?
If your W-2 includes both New York and New Jersey wages in Box 16, the New Jersey return may import both amounts when calculating New Jersey taxable income.
Because New York is your resident state, the New York wages do not need to be entered through the W-2 for New York purposes. Your income will automatically transfer to your New York return as part of your federal information.
As a result, you may need to adjust the New York Box 16 amount on the W-2 to ensure the New Jersey return reflects the correct New Jersey earnings.
How Do I Correct the W-2 Entry?
To make the correction:
- Go to Federal Section
- Choose Income - Select My Forms
- Select W-2
- Edit the applicable W-2 (Click the 3 dots)
For the New York Box 16 amount:
- Enter the difference between your total wages and the amount reported for New Jersey in Box 16.
- If the New Jersey Box 16 amount is greater than the New York Box 16 amount, enter $0 for the New York Box 16 amount.
This adjustment helps prevent New Jersey from taxing income that shouldn't be included on the New Jersey return.
What Happens on My New York Return?
As a New York resident, your income is generally included on your New York return automatically from your federal return information.
Even if you adjust the New York Box 16 amount on the W-2, your New York income will still flow to the New York return appropriately because New York taxes residents on all income, regardless of where it was earned.
Will I Receive a Credit for Taxes Paid to New Jersey?
In many situations, New York residents who pay tax to New Jersey on the same income may qualify for the New York Resident Credit for Taxes Paid to Another State.
When eligible, this credit helps reduce double taxation by allowing a credit on the New York return for taxes paid to New Jersey.
The software will typically calculate this credit automatically when both returns are completed.
Do I Need to Mail My Return?
Depending on how the wages are reported and how the correction affects the return, New York may require the return to be printed and mailed.
If mailing is required, be sure to review the filing instructions included with your completed return before submitting it.
Important Information
- New York residents generally file a New York resident return and a New Jersey nonresident return when working in New Jersey.
- Box 16 wage information may need adjustment if both New York and New Jersey amounts appear on the same W-2.
- New York income is generally transferred automatically from your federal return.
- The New York resident credit may help reduce double taxation on income taxed by both states.
- Review both state returns carefully before filing to ensure wages are reported correctly.
Additional Information
New York and New Jersey have different rules for taxing wages, which can occasionally create reporting issues when importing W-2 information. If your New Jersey return appears to include too much income, review the state wage amounts reported in Box 16 of your W-2 before filing. In many cases, a simple correction to the W-2 entry resolves the issue and allows both returns to calculate correctly.