New York / New Jersey problem

[Don in Upstate NY]

Have a client who worked in NY all year.  First half of year he lived in NJ, second half in NY.  I don't expect my software to handle this without manual intervention, but I don't know how to do it manually!

I think concept should be file part-year resident forms for both NJ and NY, and take credit on the NJ form for the tax paid to NY while a NJ resident.  Problem is that NY combines both part-year resident NY income and non-resident NY income on same form, and there is no separate calculation of the NY non-resident tax paid while client was in NJ.

Any ideas on how his should be done?

[Lion EA]

Get his paystub for the period ending closest to the move.  Or count days.

[Don in Upstate NY]

20 hours ago, Lion EA said:

Get his paystub for the period ending closest to the move.  Or count days.

Allocation of earnings between the states isn't a problem.  His W2 shows his whole federal earnings allocated to NY (as a NY W2 always will), and about half allocated to NJ. [My software complains that the total state earnings exceed the federal, but that always happens with a multi-state return with a NY W2.]  I guess I could calculate the non-resident  portion of the NY tax based on the ratio of non-resident NY income to total NY income, but not sure NJ would accept that because that number is nowhere on the IT-203 form.

[Lion EA]

I agree with your suggested technique in OP.  You will have to prorate his NY tax using the ratio of income earned before and after the move.  I go with whatever I can get from the client the easiest:  either the actual $ amount of earnings from a paystub near the move or the days worked before and after the move if client gives me the date (usually easier to get).  My software will work with the date (or $, but clients don't save paystubs very often), so I don't do any of it manually.  Can't help with the ATX part.  NY has told me "any reasonable method."