Live in NJ Paid NY State Tax – Law for Refund from NY – Money & Services

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Live in NJ worked a couple months in NY when filing our 2004 taxes with Turbo Tax I had to do a separate form for NY. NY returned all state taxes my husband paid and I claimed them on my NJ/Federal forms. Now, NY is saying I owe them most of the money back because the earned income had to match the federal income line on my federal paperwork. How can this be when the earned income for the year is more than what I earned in NY for those couple months? NY stated I had to pay them back the money and then put in to get it back from NJ. What is the law here, I filled out all the information Turbo Tax wanted and they figured it out that we get the full money back we paid into NY State tax and then I had to add it to our income on NJ / Federal sheets.

Thank you for all your help.

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You should have originally filed form IT-203 with NY State (non-resident income tax form) – is that whatTurboTax had you do? In completing that form you are required to report ALL your income, not just the amount you earned in NY. Then the actual tax calculation is based only on the amount you actually earned in NY. I think the reason they require you to report your total income for the year is to determine what your tax rate is. For example, if you earned, say, only $5K in NY State and had no other income, you would owe no NY state tax at all, as your income woud be too small, and they would refund any withholding to you. But if you earned $5K in NY State and $100K in NJ then NY would tax you on the $5K at the tax rate for someone with $105K of income. So could it be that when you submitted your NY non-resident form you did not report all your income? That would explain why NY State is now saying you owe them taxes.

Once you figure out the correct amount owed NY, you then claim a credit for that amount on your NJ taxes, so that you aren’t double-taxed. In your case you seem to have over-paid NJ for 2004, so you would have to file an amended NJ state form to claim the credit, and then NJ would return your overpayment to you. Now the bad news – it may be too late for that, as NJ only allows you to file an amended return for a refund within 3 years of the original tax return due date or 2 years of actually filing, whichever is later – that means you would have had to file an amended NJ return for tax year 2004 by April 2008. Here’s the NJ web site regarding filing amended returns:

Income Tax – How and When to Amend – NJ Taxation

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